This week’s news, read through Daniel Yergin
Something expires today, and the expiration matters less than what it reveals.
Monday marks 60 days since the United States and Iran signed the Islamabad Memorandum — the 14-point framework that was supposed to end their war, reopen the Strait of Hormuz, and open a window for a broader deal. That window closes today with no deal in sight. But calling this the collapse of a truce would flatter the last two months: both sides were accusing each other of violations within days of the June 17 signing, Donald Trump declared the memorandum “over” on July 7, and US strikes on Iran have continued since. Iran, for its part, insists the 60-day clock never even started, because Washington broke the deal first. What expires today is not a ceasefire. It is the fiction that one still existed.
The rhetoric has kept pace. Trump said last week: “Pretty soon I’ll be declaring the Hormuz strait a territory of the United States.” Iran’s deputy foreign minister shot back that the waterway always was and always will be Iranian. Foreign Minister Abbas Araghchi said Saturday that Tehran has not decided whether to return to talks at all, though Qatari and Pakistani mediators are still passing messages, and a separate Iranian-Omani track on the strait’s future administration grinds on.
The markets have priced the stalemate. Brent rose more than 5 percent last week — to $88.72 by early Monday — after attacks struck ADNOC-operated tankers in the strait and a Saudi Aramco refinery. Oil has now recovered nearly all of its early-August pullback. Gold sits above $4,400 an ounce, rebounding from a brief dip and holding near record territory.
But the real story is not the price of a barrel. It is the pattern underneath it — and that pattern was written down decades ago in the most celebrated book ever published about oil.
The book that saw this coming
Daniel Yergin’s The Prize: The Epic Quest for Oil, Money, and Power (1990) won the Pulitzer Prize in 1992 and remains the definitive history of the oil industry — a century of struggle for the world’s most important resource, from the first Pennsylvania well in 1859 to Saddam Hussein’s invasion of Kuwait.
Yergin’s core idea is simple but profound: oil was never just a commodity. From the moment Winston Churchill converted the Royal Navy from coal to oil before the First World War — chasing what he called “mastery” as the prize of the venture — oil became the lifeblood of industrial civilization, and therefore the master variable of geopolitics. Every oil crisis in history, Yergin shows, was a geopolitical event wearing an economic costume.
That idea is the lens through which everything happening in the Strait of Hormuz suddenly makes sense.
A hundred years of the same play
Before this war began, roughly a fifth of the world’s oil and liquefied natural gas passed through the Strait of Hormuz. Whoever controls it controls the world’s energy arteries. Yergin’s book is full of moments where that simple geography drove history.
In 1973, Arab producers used the “oil weapon” for the first time, embargoing the West over the Yom Kippur War and quadrupling prices overnight. The shock remade the global economy: runaway inflation, smaller cars, the fuel economy standards we still live with, the creation of the International Energy Agency and national strategic petroleum reserves.
In the 1980s, the Iran-Iraq war turned the Gulf itself into a battleground. Both sides attacked oil tankers — the “tanker wars” that forced Western navies to escort merchant shipping through the same strait where tankers were struck again last week.
In 1990, Saddam invaded Kuwait partly over oil, closing the era Yergin’s book chronicles.
This year, the play has repeated almost line for line. The war that the US and Israel launched against Iran on February 28 effectively shut the strait within weeks. A ceasefire on April 7 paused the fighting after five weeks; the June memorandum was supposed to formalize the peace and reopen the waterway. Neither held. And Asia — the destination for roughly 80 percent of the oil and 90 percent of the LNG that transited Hormuz — absorbed the shock first. During the spring closure, Pakistan, the Philippines, and Sri Lanka imposed four-day workweeks; Thailand ordered civil servants to work from home; schools closed, fuel was rationed, and the IEA coordinated the largest emergency stock release in its history — 400 million barrels.
What the history gets right this time
Yergin’s most instructive finding from 1973 applies directly to today: supply shocks do not end the oil era — they rewire it. The embargo did not make the world abandon oil. It made the world use oil more carefully, build buffers, develop alternatives, and change behavior at the margin.
That rewiring is visibly underway. Countries that drew down reserves in the spring are racing to rebuild and expand them. Efficiency mandates have multiplied across importing nations. And the infrastructure response has begun: Washington is backing an Iraq-to-Syria pipeline — with a Chevron-led consortium funding feasibility studies — as part of a declared strategy to route Gulf exports around Hormuz entirely. Treasury Secretary Scott Bessent claims the strait will become “just another body of water” within two years, with the majority of exports moving by pipeline. Sources close to the project tell Reuters the realistic timeline is closer to eight years and at least $15 billion. The gap between those two numbers is the gap between political ambition and steel in the ground — but the direction is unmistakable.
At the same time, Yergin would caution against reading too much into any single moment. His history shows that energy transitions move in decades, not days, and that oil remains deeply embedded in transport, agriculture, and construction. The Hormuz crisis may mark the beginning of the end of the oil era — but the end of an era takes a long time to arrive.
What to watch this week
With the memorandum’s window closed, the question is whether either side has an incentive to escalate or to quietly rebuild a channel. Trump’s claim over the strait raises the stakes: a US declaration of control over a waterway Iran considers its lifeline is precisely the kind of move that forecloses the off-ramp both sides say they want. Watch the Omani track — it is the only live negotiation about what the strait becomes after the war.
For markets, the lesson from the book is that volatility is not noise — it is the message. When a chokepoint that carried a fifth of global oil stays contested for six months, energy security trumps cost for every importing nation, and capital flows toward alternatives accordingly. The current price of a barrel matters less than the direction the crisis is pushing investment.
If this is 1973 again, we are in the early pages of a long adjustment. The next chapter will be written in reserves, pipelines, solar panels, and navies — not just in the price of a barrel.
This week’s book: Daniel Yergin, The Prize: The Epic Quest for Oil, Money, and Power (Simon & Schuster, 1990; Pulitzer Prize winner, 1992).
Sources: Al Jazeera live blog (Aug 17, 2026); Reuters (oil prices Aug 17; Hormuz crisis analysis June 26, 2026); Britannica, “2026 Iran war”; AP News. Book: Daniel Yergin, The Prize (1990), Pulitzer Prize for General Nonfiction 1992.