As the Iran war enters its third week, the global crude oil market is witnessing a rare disconnect between futures and physical markets. The benchmark Brent crude futures have surged over 50% to approximately $112 per barrel. However, the actual cost in the physical market is significantly higher, with prices for refined products like jet fuel already exceeding $200 per barrel.

Jeff Currie, Chief Strategy Officer for Energy Pathways at Carlyle Group, stated plainly: "The futures market has completely decoupled from the physical market. We are facing a massive supply shock."

The failure of futures prices to fully reflect the surge in spot prices is largely due to a series of policy tools intensively deployed by the United States to suppress oil prices. However, these tools are rapidly being depleted.

In the physical market, the impact on consumers far exceeds what futures prices indicate. The near-total closure of the Strait of Hormuz, combined with attacks on energy facilities in the Middle East, has severely constricted physical crude supply. Asian refineries are forced to purchase cargoes at high premiums from thousands of miles away.

The ripple effects are becoming evident at various levels: jet fuel prices have broken through $200 per barrel, prompting major European airlines to announce that additional costs will be passed on to passengers; trucking companies are beginning to feel the pressure; and some regions have already cut back on marine fuel purchases. The International Energy Agency has characterized this event as the largest oil supply disruption in history.

Goldman Sachs estimates that approximately 17 million barrels per day of Persian Gulf crude flow are affected by the conflict. The actual inflationary impact is far greater than what is reflected in futures prices, putting pressure on central banks and the Trump administration, which faces midterm elections in November.

The U.S. toolkit for stabilizing oil prices is nearly exhausted. Over the past two weeks, Brent crude twice approached $120 per barrel—a level not seen since 2022—forcing Washington to play its cards intensively.

Measures include releasing Strategic Petroleum Reserve stocks, with one major release already announced. U.S. Treasury Secretary Bessent stated on Fox Business Thursday that another release is under consideration, although its logistical feasibility is already being questioned. Other actions involve lifting sanctions on Russian seaborne oil to try and increase alternative supply sources, and considering an easing of sanctions on Iranian oil—a subsequent statement from Bessent that stunned already weary traders. The idea of easing sanctions on Iran while simultaneously being at war with Tehran left global traders, long cautious about Iranian dealings, expressing disbelief.

There is also widespread market speculation about direct U.S. intervention in futures trading, which Bessent has denied. Meanwhile, extreme volatility has increased the cost of holding positions,客观上 limiting traders' position sizes and exerting some downward pressure on futures—though this effect is limited compared to the shock from the Strait of Hormuz disruption.

The price shock could intensify further. Both Goldman Sachs and Citigroup warned this week that if the conflict persists, futures prices could surpass the historical record of $147.50 per barrel set in 2008 within the coming weeks.

It is noteworthy that a prolonged and significant divergence between futures and spot prices is historically uncommon. This suggests the gap between the two will eventually narrow—but not necessarily through a decline in spot prices.