Rep. Ritchie Torres, D-N.Y., on Wednesday called for a federal probe into suspicious trading activity in oil and equity futures markets just before President Donald Trump’s announcement of a five-day delay in attacks on Iran’s energy infrastructure in March.

In a letter to Securities and Exchange Commission Chair Paul Atkins and Commodity Futures Trading Commission Chair Michael Selig, first reported by CNBC, Torres cites reports on a series of irregular and well-timed trades in the minutes ahead of Trump calling a pause on hostilities.

“What kind of trader would make a massive trade at 6:49 a.m., 15 minutes before a market-moving presidential announcement with billions of dollars at stake and without a hedge?” Torres said in an interview on Wednesday. “The only plausible answer to that question is an insider trader. Any other alternative is a statistical impossibility.”

More than $500 million in crude oil futures trades were made in the roughly 15 minutes before Trump announced the halt in strikes via Truth Social, Reuters reported last month. The New Yorker reported that in the immediate lead-up to Trump’s announcement, there was an abnormal surge in futures trading volume predicting a decline in oil prices and a rebound in equity markets.

Torres in his letter said the “occurrence may constitute one of the largest instances of insider trading in history,” and called on the SEC to open a formal investigation and, in consultation with the CFTC, obtain comprehensive trading records.

A spokesperson for the SEC on Wednesday declined to comment. The CFTC did not immediately respond to a request for comment.

The SEC tapped David Woodcock, a Gibson Dunn lawyer and former agency official, to be its next enforcement director, Reuters reported Wednesday.

“I have a lack of confidence in our market regulators,” Torres said in the interview. “But we have no choice but to agitate for accountability. We cannot allow the SEC and the CFTC to turn a blind eye to what may be the largest case of insider trading in history.”

This is the second time in several months that Torres — a member of the House Financial Services Committee — has raised the issue of potential insider trading around Trump administration actions.

Torres introduced legislation in January after an account on the prediction market platform Polymarket placed a well-time bet in the hours leading up to the ouster Venezuelan President Nicolás Maduro, earning a $400,000 payout.

The legislation would bar federal elected officials, congressional staff, political appointees and executive branch officials from buying or selling event contracts based on government policy, action or political outcomes if they have material nonpublic information. It has 42 Democratic cosponsors but is unlikely to pass in the Republican-controlled House.

Congressional Democrats in recent months have repeatedly raised concerns about the appearance of insider trading within the Trump administration, particularly on prediction markets. A group of House Democrats on Monday sent a letter to Selig questioning the CFTC’s role in regulating event bets placed on offshore prediction markets like Polymarket.

“Recent high-profile instances of alleged insider trading on prediction market platforms relating to U.S. government actions — including the military’s intervention in Venezuela and our recent attack on Iran —have fueled concern that the CFTC does not have adequate control over these fast-growing markets,” wrote the group, led by Reps. Seth Moulton and Jim McGovern, Massachusetts Democrats.

A temporary U.S.-Iran ceasefire sparked a broad relief rally across assets on Wednesday, but experts warned that any deal concerning lasting peace will be complicated by a major trust deficit.

The ceasefire came following hastened diplomatic efforts led by Pakistan and just hours before Trump’s threatened deadline for wiping out the entire Iranian civilization, briefly pulling the region back from the brink of a massive military bombardment.

Oil prices cooled to below $100 per barrel following the ceasefire announcement, but remain far above the pre-war levels of around $70 per barrel.

While U.S. President Donald Trump said the two-week ceasefire was contingent on the “complete, immediate, and safe opening” of the Strait of Hormuz, Iranian officials stated that safe passage through the strait would be “possible,” subject to coordination with its armed forces and “technical limitations” — caveats that may give Iran some room to define compliance on its own terms.

“This is a problem that could derail the ceasefire later this year,” said Matt Gertken, chief geopolitical strategist at BCA Research, warning that the coordination requirement remains a risky ambiguity in both sides’ statements so far.

Trump may temporarily accept Iran as a gatekeeper — with U.S. midterm elections approaching and gasoline prices sharply higher than before the war — but after the election, the U.S. national security establishment will start to demand a more permanent solution,” said Gertken. “Fighting will ignite later this year, if not later this month.”

Tehran also said that its armed forces will cease defensive operations if attacks against Iran are halted. After the ceasefire came into effect at 8 p.m. ET Tuesday, missiles were still launched from Iran towards Israel and several Gulf states.

The reprieve on Tuesday would allow some time for the two sides to reach a longer agreement to end the six-week-old war, which has killed thousands of people and sparked a global energy crisis, with their delegations expected to meet in Islamabad on Friday.

Iran is reportedly finalizing a joint maritime protocol with Oman to institutionalize coordinated management of tanker traffic through the strait, which could embed Iranian authority over the crucial energy artery into a standing bilateral agreement.

Israel agreed to suspend strikes but urged Washington to press for deeper Iranian concessions, including the surrender of enriched uranium stockpiles. In its 10-point terms, Iran requested Washington to accept its uranium enrichment program and the lifting of all sanctions.

The ceasefire will likely hold in the near term, given the economic costs accruing to the global economy from six weeks of conflict, said Michael Langham, emerging markets economist at Aberdeen Investments. “Parties with vested interest in stopping the conflict and reopening the strait will double down on efforts to find a compromise,” he said.

If the truce holds and the strait reopens, the global economic damage should prove manageable, Langham added. Central banks could broadly resume their pre-conflict paths — and attention may shift from inflation to growth, if commodity prices normalize quickly, he added.

The ceasefire sparked a relief rally in markets amid repricing for a de-escalation in the conflict, but investors will watch for something more durable than a two-week pause, Geoff Yu, senior market strategist at BNY, said on CNBC’s “Squawk Box Asia” on Wednesday.

“What the market is going to start pricing ahead is a first step towards further de-escalation and perhaps something more permanent,” he said, flagging that the disruption has extended beyond crude oil to commodities such as helium, critical to semiconductor manufacturers in South Korea and Taiwan.

The surging price of jet fuel isn’t the airline industry’s only problem. Now, it’s whether it will have enough.

Since the U.S. and Israel attacked Iran on Feb. 28, the price of jet fuel in the U.S. has nearly doubled, going from $2.50 a gallon on Feb. 27 to $4.88 a gallon on April 2, with the increases even sharper in other regions. The effective closure of the Strait of Hormuz is choking off supplies of both crude and refined products like jet fuel, further driving up the price.

That’s forcing airlines to consider cutting flights, especially overseas.

Carsten Spohr, CEO of Germany’s Deutsche Lufthansa, told employees in a webcast last week that the carrier is assigning teams to come up with contingency plans because of the war in the Middle East, including for drops in demand or a lack of jet fuel, a spokesman said. Those plans could include grounding some of its aircraft.

The U.S. produces a lot of jet fuel and isn’t as exposed as other regions like Europe and parts of Asia are in comparison. But aircraft fill up locally, so some U.S. airlines could face shortages on international trips.

United Airlines CEO Scott Kirby told reporters late last month that the carrier, which has the most service to Asia among U.S. airlines, would have to cut back its flights there. He also said it’s “not impossible” that airlines collectively would have to reduce service in that region.

He noted that as the price of jet fuel goes up, it could be more acute in parts of the U.S. that aren’t as connected by pipelines.

“There’s not enough refining capacity, and so fuel price prior to this and going forward is more susceptible to supply weakness on the West Coast than anywhere else in the country,” he said.

Kirby told employees earlier in March that the airline is preparing for oil to stay above $100 a barrel through 2027 and is pruning some of its flights in the near term.

“To be clear, nothing changes about our longer-term plans for aircraft deliveries or total capacity for 2027 and beyond, but there’s no point in burning cash in the near term on flying that just can’t absorb these fuel costs,” he said in a March 20 message to employees.

Airlines overall are pruning some flights for the coming months, though they often adjust schedules throughout the year to match demand, aircraft availability or other complications.

Domestic capacity in the second quarter for U.S. carriers is up 2.1%, down from previous plans of 2.3% growth, while total capacity is set to rise 1.1%, down from 2.4% on the week ended March 20, according to a Monday report from UBS.

“We expect more capacity cuts in the coming weeks,” UBS said.

So far, airline executives have said that travel demand is strong, but the fuel strains and price spikes are a headache for carriers and passengers alike as the peak summer travel season approaches.

Fuel is generally airlines’ biggest expense after labor, and carriers are already raising airfare and fees like for checked luggage to make up for the added cost.

Investors will be listening for more insights into how the jet fuel spike could affect the industry as airline earnings kick off Wednesday with Delta Air Lines. That carrier owns a refinery, so it could benefit from jet fuel sales.

Oil prices edged higher after U.S. President Donald Trump doubled down on his threats to attack Iran’s civil infrastructure, warning that the nation will be “taken out in one night,” if the Islamic Republic’s leadership failed to reopen the Strait of Hormuz.

U.S. West Texas Intermediate crude futures for May were up 0.93% at $113.46 per barrel as of 8:45 p.m. ET. Brent crude for June delivery gained about 0.54% to $110.36 per barrel.

On Monday, Trump repeated his threat that the U.S. will destroy Iran’s power plants and bridges if Tehran did not reopen the Strait of Hormuz by 8 p.m. ET on Tuesday, while also signaling that Iranian leadership was negotiating in earnest.

The closure of the narrow waterway connecting the Persian Gulf and Gulf of Oman has led to a supply shock, sending prices for crude, jet fuel, diesel, and gasoline soaring since the war broke out on Feb. 28.

“They have ’til tomorrow,” the president said. “Now we’ll see what happens. I can tell you, they are negotiating, we think in good faith, we’re going to find out. We’re getting the help of some incredible countries that want this to be ended, because it affects them also.”

Reuters reported that the U.S. and Iran were discussing a framework plan to end their 5-week-old conflict, as Tehran has pushed back against Trump’s pressure to swiftly reopen the Strait of Hormuz, which would allow traffic to start flowing again through the vital energy artery.

Iran has rejected the U.S. ceasefire proposal, presenting its own 10-point plan, according to Axios, including a permanent end to hostilities in the region, rather than a temporary ceasefire, a protocol for safe passage through the Strait of Hormuz, lifting of sanctions, and reconstruction.

But the changes for a ceasefire deal to be reached before the deadline remained slim, according to the report.

Trump responded to the proposal, saying that “They made a … significant proposal. Not good enough, but they have made a very significant step. We will see what happens.”

“As the deadline approaches, [Trump] wants to apply even more pressure to get them across the finish line,” Brain Jacobsen, chief economic strategist at Annex Wealth Management.

Shipping through the Strait of Hormuz is slowly resuming, with 8 tankers transiting Monday, up from the average of fewer than 2 transits per day in March, according to S&P Global Market Intelligence. That, however, is a fraction of the pre-war levels with an average of 20 million barrels of crude oil and products transiting per day via the strait in 2025.

President Donald Trump on Monday said the latest proposal for a U.S. ceasefire with Iran is “significant” but “not good enough” ahead of his fast-approaching deadline for Iran to either reopen the Strait of Hormuz or else face major attacks on its civilian infrastructure.

“They made a proposal, and it’s a significant proposal. It’s a significant step,” Trump told reporters on the White House South Lawn during the traditional Easter Egg Roll.

“It’s not good enough, but it’s a very significant step,” he said, adding, “They’re negotiating now, and they’ve made a very significant step. We’ll see what happens.”

While Trump’s remarks suggested Iran itself had submitted the proposal, Tehran has explicitly rejected any temporary ceasefire, instead calling for a path to end the war permanently.

Iran sent Pakistan, a mediator between Washington and Tehran, an official 10-point response to the U.S. that includes “a protocol for safe passage through the Strait of Hormuz, reconstruction, and the lifting of sanctions,” according to a translated report from Iranian state media outlet IRNA.

Trump’s latest comments came after a White House official told CNBC Monday morning that the president has not backed a 45-day ceasefire idea that is reportedly in discussion among the two warring nations and regional mediators as of Sunday night.

Asked about that proposal at the Easter event, Trump said, “The only one that’s going to set a ceasefire is me.”

Trump is holding a press conference at the White House that started at 1 p.m. ET.

The ceasefire is being floated as a last-ditch effort ahead of Trump’s upcoming deadline for Iran to reopen the Strait of Hormuz, a vital oil-shipping route that has been effectively closed since the war began on Feb. 28.

In a profanity-laced social media threat on Sunday, Trump warned the U.S. would begin strikes on Iranian bridges and power plants unless Tehran agreed to “Open the Fuckin’ Strait” by Tuesday night.

The 45-day proposal could lead to an end to the five-week-old war, Axios first reported Sunday evening, citing sources with knowledge of the talks.

But a White House official, speaking on condition of anonymity, told CNBC on Monday morning, “This is one of many ideas, and [Trump] has not signed off on it.”

“Operation Epic Fury continues,” the official said, noting Trump “will speak more at 1pm” ET.

Trump’s belligerent Truth Social threat that Tuesday “will be Power Plant Day, and Bridge Day, all wrapped up in one” showed him tacitly extending a previously imposed 10-day pause on attacks, which was set to expire Monday.

In a separate post Sunday night, Trump said the new deadline is 8 p.m. ET on Tuesday.

This is developing news. Please check back for updates.

U.S. President Donald Trump on Thursday threatened to destroy Iran’s bridges and power plants, saying the “New Regime leadership knows what has to be done, and has to be done, FAST!” in a Truth Social post.

Trump did not elaborate on what needed to be “done,” but said the U.S. “hasn’t even started destroying what’s left in Iran.”

Hours later, Iran’s semi-official Tasnim news agency reportedly claimed that a U.S. F-35 fighter jet was shot down over central Iran. Images of the jet were posted on Telegram, with one photo that appeared to show the words “U.S. Air Forces in Europe” on what appeared to be the tail section of a plane.

The U.S. Central Command, which oversees the region, and Iranian authorities did not respond to a request for comment at the time of publication.

Trump’s latest threat came a day after a nationwide address in which he said the U.S. military would hit Iran “extremely hard” for the next two or three weeks. He added that the U.S. would “bring them back to the Stone Ages where they belong.”

Hours after his speech, Iranian Foreign Minister Abbas Araghchi struck a defiant tone on X, saying that “there was no oil or gas being pumped in the Middle East back then,” referring to Trump’s stone age remarks.

“Are POTUS and Americans who put him in office sure that they want to turn back the clock?” Araghchi said.

Iran has effectively shut tanker traffic through the Strait of Hormuz, a vital global oil route, after the U.S. and Israel attacked the country on Feb. 28.

Trump has repeatedly threatened to send Iran back to the “stone age” as the war entered its second month and the U.S. military build-up in the Middle East showed no signs of slowing.

Despite reports of overtures from the U.S., including ceasefires and a 15-point peace plan to end the war, Iran has publicly contradicted multiple reports about negotiations with the Trump administration on numerous occasions.

Tehran had described the 15-point proposal as “extremely maximalist and unreasonable,” according to an Al Jazeera report on March 25, citing a high-ranking diplomatic source.

Trump said Wednesday that Iran’s “New Regime President” had asked Washington for a ceasefire, a claim that Tehran has denied. Trump has not specified who the “President” is.

“We will consider when Hormuz Strait is open, free, and clear. Until then, we are blasting Iran into oblivion or, as they say, back to the Stone Ages!!!,” he wrote.

Attacks on power plants could constitute a war crime and violate international law, legal experts said.

In a letter dated Thursday and signed by over 100 law experts, the group said international law prohibits attacks on “objects indispensable to the survival of civilians, and the attacks threatened by Trump, if implemented, could entail war crimes.”

Trump had also earlier said that he could target water desalination plants in Iran.

The Gulf Cooperation Council on Thursday called on the United Nations Security Council to take “all necessary measures to ensure the immediate cessation of Iranian aggressions against the Council states.”

The six countries in the Gulf Cooperation Council — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates — have come under attack from Iranian missiles and drones as the war entered its second month.

The Kuwait Petroleum Corporation said that its Mina al-Ahmadi refinery was hit by drones early on Friday.

Jassim Albudaiwi, Secretary-General of the Gulf Cooperation Council, said that while the bloc does not seek war, Iran had “exceeded all red lines” and described Tehran’s attacks as “treacherous.”

Bahrain, the current rotating president of the Security Council, has led an effort to pass a U.N. resolution to ​authorize “all necessary means” to protect commercial shipping in and around the Strait of Hormuz.

But the proposal reportedly stalled after veto-wielding Security Council members China, Russia and France objected to the draft resolution, which would have authorized military action against Iran.

“The hard part is done,” President Donald Trump said in his address to the nation Wednesday night about the Iran war. The recent jump in gas prices is “short term increase” that should “will rapidly come back down” once the vital Strait of Hormuz is reopened, he said.

But there is reason to worry that the conflict and its economic consequences for Americans may get worse before they get better. If so, Trump will struggle to shake off the damaging political legacy of the war.

In that he would join a long line of U.S. presidents going back to the 1970s who have seen their tenures defined by energy crisis and inflation — the economic scourge Trump has called a “nation-buster.” 

“The oil shock of the ’70s was planted in the maybe subterranean part of our brains,” said Jay Hakes, a presidential historian who led the U.S. Energy Information Administration in the 1990s during the Clinton administration. 

“It was there for a long time because it was just such a jolt. And I think this will be that kind of jolt,” Hakes said.

Gas prices on Tuesday rose above $4 a gallon on average for the first time since the war began. Gas has followed Brent crude prices that have risen 27% since the war began to just over $100 a barrel Wednesday. Oil tankers and other commercial shippers that would normally travel through the narrow Strait of Hormuz off Iran’s southern coast have been idled due to Iran’s threats and attacks. The waterway normally carries 20% of the world’s oil. 

But $4 a gallon gas, painful as it is, may only be the tip of the iceberg. That is clearer in the rest of the world than the U.S., for now. The U.K. is set to receive its last shipment of jet fuel for the foreseeable future this week. Prices of jet fuel worldwide are up 96%, according to Platts data published by the International Air Transport Association. Futures contracts for liquid natural gas in Japan and South Korea are up 43%, according to FactSet data. 

Asia and to a lesser extent Europe are more immediately exposed to disruptions in supply from the Strait of Hormuz. Unlike the U.S. — as Trump has repeatedly pointed out — they buy directly from the Middle East. But all of these commodities are connected through global markets. Disruptions in one part of the world will quickly spread to others. Analysts fear the price of oil could jump above the record near $150 a barrel set in July 2008 during the Great Recession.

So far, the world has benefited from energy supplies that were already in transit when the war began just over a month ago, aided by emergency releases from strategic petroleum reserves. But the world is burning through those supplies. 

“With even the modest estimates we have now, the loss of oil in April will be twice the loss of oil in March,” International Energy Agency Executive Director Fatih Birol said on a podcast released Wednesday.

Governments around the world are trying to encourage energy conservation in the face the crisis. A tracker from the IEA shows 26 governments have taken steps such as Pakistan lowering the speed limit.

Trump has taken steps to encourage the market to improve supply but has stopped short of calling on Americans to try to conserve energy. Doing so might call back uncomfortable comparisons to President Jimmy Carter’s attempts after the 1979 crisis, which began with the Iranian Revolution. Ronald Reagan turned Carter’s calls for consumers to limit themselves into a potent political weapon, winning him the presidency the next year. 

And Trump has spent part of his terms in the White House calling for limits on construction of and subsidies for renewable energy production.

The politics of energy have taken a toll on the nation. “We’ve lost our ability to ask the American public to sacrifice,” Hakes said. 

Before Carter, presidents — including Republicans — called on a need for shared sacrifice. President Richard Nixon proposed a national speed limit of 55 miles per hour following the Arab Oil Embargo of 1973. It was passed into law the next year, but even before that Nixon urged people to slow down, “and they did,” Hakes said. 

“We still had a little bit of the World War II mentality,” Hakes said. 

The energy crises of the 1970s put the nail in the coffin of that mentality. Nixon and Carter struggled to lower prices, and inflation surged. Carter put Paul Volcker in place as Federal Reserve chair to tackle inflation — which he eventually did, but only by raising interest rates high enough to prompt a recession, followed by record-high mortgage rates. Carter, of course, wasn’t re-elected.

Americans’ sense of what government can and should do was permanently changed.

“The failure of the nation’s politicians to address the energy crisis contributed to the erosion of faith that Americans had in their government to solve the problems,” Princeton University historian Meg Jacobs wrote in “Panic at the Pump: The Energy Crisis and the Transformation of American Politics in the 1970s.”

“If the Vietnam war and Watergate scandal taught Americans that their presidents lied, the energy crisis showed them that their government didn’t work,” Jacobs wrote.

Today, Trump’s premise as president is that government only works when he is in charge. “Nobody knows the system better than me, which is why I alone can fix it,” he said at the 2016 Republican National Convention. He has centralized control of the executive branch in the Oval Office, drawing power from cabinet secretaries and agencies that previously operated autonomously. 

The worst-case worries may not come to pass. The U.S. could quickly force Iran to capitulate, and the global economy could heal fast, as it did after the shock of the Russian invasion of Ukraine. But if not, Trump’s decision to go to war in Iran may only deepen many Americans’ alienation from their government. And as the sole decider atop the federal bureaucracy, Trump will have a difficult time convincing the public that anyone but him bears responsibility. 

JetBlue Airways is raising bag fees at least $4 as jet fuel prices soar amid the Iran war.

Airfare has climbed for routes around the world since the U.S. and Israel attacked Iran on Feb. 28. The higher fees for checked bags are the most recent sign of airlines passing steeper fuel costs down to U.S. consumers. Jet fuel is airlines’ biggest expense after labor.

JetBlue now lists the price to check a first piece of luggage for domestic, Caribbean and Latin America flights as $39 for off-peak periods for most economy passengers, up from $35. For peak periods, like much of the summer and major holidays, the fee will go up to $49 from $40.

If paying less than 24 hours before departure, such as at the airport, travelers will pay $10 more. Airlines have charged customers less for prepaying for their checked baggage in recent years.

There are exemptions to the bag fees entirely, however, such as travelers with a co-branded credit card and frequent flyers with elite status.

“As we experience rising operating costs, we regularly evaluate how to manage those costs while keeping base fares competitive and continuing to invest in the experience our customers value,” JetBlue said in a statement to CNBC.

When an airline raises fees, competitors often follow. American Airlines, United Airlines, Delta Air Lines, Southwest Airlines and Frontier Airlines didn’t immediately respond to CNBC’s requests for comment.

Fuel prices for Chicago, Houston, Los Angeles and New York averaged $4.57 a gallon last Friday, up nearly 83% since the day before the war began, according to data from Argus published by industry group Airlines for America.

“Adjusting fees for optional services used by select customers, such as checked baggage, allows us to continue offering more competitive fares while delivering the onboard experience our customers love, including complimentary snacks and drinks, unlimited, high-speed Wi-Fi and seatback entertainment screens,” JetBlue said. “While we recognize that fee increases are never ideal, we take careful consideration to ensure these changes are implemented only when necessary.” 

U.S. President Donald Trump said Monday that the U.S. will “completely” obliterate Iran’s electric generating plants, oil wells and Kharg Island if the strategically vital Strait of Hormuz is not “immediately” reopened and a peace deal is not reached “shortly.”

“The United States of America is in serious discussions with A NEW, AND MORE REASONABLE, REGIME to end our Military Operations in Iran,” Trump said in a post on Truth Social.

“Great progress has been made but, if for any reason a deal is not shortly reached, which it probably will be, and if the Hormuz Strait is not immediately “Open for Business,” we will conclude our lovely “stay” in Iran by blowing up and completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinization plants!), which we have purposefully not yet “touched.””

His comments come as the Iran war enters its fifth week and as the Trump administration weighs sending in ground forces to seize Kharg Island, a major fuel hub which serves as the centerpiece for Iran’s oil industry.

It is estimated that around 90% of the country’s crude exports pass through it before tankers then travel through the Strait of Hormuz. The island is also said to have a loading capacity of roughly 7 million barrels per day.

Iran has not yet commented on Trump’s latest remarks. Earlier in the day, a spokesperson for Iran’s Foreign Ministry reportedly said Iran deemed proposals presented in a 15-point plan from the U.S. as “excessive and unreasonable.” Iran’s leaders have denied being in direct talks with the U.S.

Shipping traffic through the Strait of Hormuz has virtually ground to a halt since the U.S. and Israel launched strikes against Iran on Feb. 28. Iran has retaliated by targeting ships trying to pass through the maritime corridor, with several incidents reported in recent weeks.

Trump said last week that he would pause attacks on Iran’s energy plants for 10 days, which pushed the deadline to April 6.

Oil prices traded higher on Monday, with international benchmark Brent crude on track to notch its steepest monthly rise on record.

The clock is ticking on the U.S.-Israeli war in Iran. The emerging view from oil industry executives and analysts is that the economic and market fallout from the war could escalate sharply if the Strait of Hormuz isn’t reopened within roughly the next one to three weeks. Even then, enough damage may have been done already to leave energy and many other prices higher for longer. 

These risks haven’t been clearly reflected in some widely followed markets, including stocks broadly and the benchmark Brent crude price. Stopgap measures to soften the blow of the oil cutoff have kept crude prices relatively low in the U.S. and European markets. But when those measures lose their effectiveness in early-to-mid April, analysts warn there will be little the U.S. or other governments can do to keep energy prices from rising dramatically. 

Iran has attacked civilian ships and energy infrastructure in its neighborhood, causing traffic in the narrow Strait of Hormuz to fall to a standstill. Roughly 20% of global oil supply normally moves through the approximately 100-mile waterway, which borders Iran. Some oil has been rerouted through pipelines, but they can only carry so much. The U.S. and others are releasing 400 million barrels of oil from strategic reserves — the biggest release on record — and the U.S. has temporarily lifted sanctions on some Russian and Iranian oil to give the market breathing room.

The White House says it believes the president’s military strategy will soon end the Iranian threat, allowing the price worries to fade.

But all agree there is no substitute for reopening the strait. Oil industry executives have in the past few days sketched out the risk of growing disruption from the war. 

“There are very real, physical manifestations of the closure of the Strait of Hormuz that are working their way around the world,” Chevron CEO Mike Wirth said Monday at S&P Global’s CERAWeek in Houston. Shell CEO Wael Sawan echoed him a few days later at the annual gathering of industry heavyweights. Disruptions that started in South Asia have “moved to Southeast Asia, Northeast Asia and then more so into Europe as we get into April,” Sawan said Wednesday.

The talk of the conference was the difference between so-called paper and physical prices, said Ben Cahill, director for energy markets and policy at the Center for Energy and Environmental Systems Analysis, University of Texas at Austin. 

Paper prices reflect trading in financial markets and are often the headline oil prices discussed in the press. They have generally remained lower than prices for physical delivery of oil, especially in Asia, which is the main buyer of crude from the Middle East.

Brent crude futures prices rose 36% from Feb. 27, the last day of trading before the started, through March 27, when they traded above $113 a barrel. But the Dubai price, which tracks physical delivery from certain Middle East sellers, is up 76%, more than twice the paper price, at $126. That price has been especially volatile lately. 

One reason paper prices are lower is they have regularly fallen in reaction to suggestions by President Donald Trump that the war could soon end or otherwise de-escalate. Traders call that “jawboning.” 

The looming possibility of physical supply shortages in the oil market appears to be blunting the effect of Trump’s jawboning. Financial markets reflect the reality that Trump has often managed to avoid worst-case scenarios, including when he attacked Iran’s nuclear program in June. Oil futures then spiked but quickly fell once it was clear the war wouldn’t spread.