You don’t need me to tell you that oil prices – and the price of gasoline and other related products – are sky-high, largely thanks to the unsettled situation in the Strait of Hormuz.

You might assume that since this has dragged on since February, it’s already “priced in” and can only go down from here. Well, you would be wrong.

McTEAGUE: Canada could supply oil and gas the world needs now Back to video

As high as prices are, oil remains underpriced relative to the actual supply available to meet global demand. When the market catches up to that reality, prices won’t just creep higher. They’ll explode.

Why don’t prices reflect reality? For months, officials have assured us that Hormuz would reopen any day now, or that the Khomeinist regime behind the disruption was on the verge of collapse. Neither has happened. But with each optimistic projection, traders have priced in a happy ending. And when it fails to arrive, they seem to........

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