The closure of the Strait of Hormuz has trapped hundreds of tankers in the Persian Gulf. Fear that exporters will be unable to export crude has triggered a vertical surge in global oil prices. However, the paradox of the situation is that oil futures today paint a distorted, overly optimistic picture of the world, writes Bloomberg.

We are seeing an unprecedented divergence between prices in the physical market, where actual barrels for immediate loading are bought and sold, and the "paper" market, which reflects the value of financial derivatives, including futures and options.

Right now, refineries are forced to overpay about $30 per barrel on the physical market above the price of the nearest oil futures contract. This is a historical record; under normal conditions, such a difference rarely exceeds $2. This pricing pattern suggests one thing: traders are betting that the severe commodity shortage won't last for many months. In a war-torn environment, where the conflict could be resolved or frozen at any moment by political decision, investors are categorically unwilling to make long-term bets on maintaining extremely high prices.

While this enormous $30 premium is primarily driven by the war in Iran, the gap between near- and far-off prices is also due to calendar factors. The futures market for the benchmark Brent crude oil grade trades almost two months ahead of the physical market. This means that the closest available futures contract is currently the June contract. Meanwhile, physical benchmarks (such as Dated Brent) reflect prices for immediate delivery. According to Amrita Sen, founder of the consulting firm Energy Aspects Ltd, most market participants are confident that Donald Trump will find a way to end the conflict, as he does not want to risk his political approval ratings due to high oil prices ahead of the critical midterm elections in November.

Since the start of the war, gasoline prices have risen sharply in many countries around the world. In the US, retail prices at the pump are breaking seasonal records: the average price of gasoline has exceeded the psychological mark of $4 per gallon. Opinion polls show that the majority of Americans disapprove of military operations against Iran and are seriously frightened by the economic consequences of the war.

The rapid rise in fuel prices has already set the wheels of new inflation in motion. The rise in gasoline, diesel, and jet fuel prices is rippling across the US and global economies: since the start of the conflict, prices for airline tickets, food, and logistics services have been steadily rising.