We're not seeing the true scope of just how bad things and are going to get.

There are ~9 different oil "flavors" traded in large volume in the world. The big factors are primarily API gravity [1] and sulfur content. Low sulfur content is generally better but the sulfur is extracted into necessary products (primarily fertilizer). Likewise, the API gravity favors higher gravity, which actually means lighter crude. So when you see terms like "sweet, light crude" "sweet" means "low sulfur content" and "light" is high gravity. But heavier crude still has applications like building roads.

Oil is traded on futures markets. A futures contract is standardized for the type of oil, standard amounts (typically 1000 barrels per contract) and a delivery date. This allows producers to forward sell oil and consumers to forward buy it, both of which are just hedging price risk.

The price you see publicly is the future price. What isn't public is the spot or physical price. Historically those tracked each other. They have diverged in the last 2 months by upards of $40/barrel [2]. We've seen Dubai oil trade at $180+/barrel physical and Brent is really at more like $140-150.

Nobody in the know or in the business trusts the futures prices anymore.

This can happen in what's called a market of extreme backwardation. That simply means the spot prices are higher than the future price. The market seems to believe the supplies are currently constrainted but the Strait will be reopened in the short term. This is likely overly optimistic.

On a side note we saw extreme market backwardation in the silver market in late 2025 where again the paper (future) price was a lie and refiners were buying at the supposed spot price so different circumstances to this.

The second issue is that there have been record releases from strategic reserves to try and stabilize prices [3]. Even so, stockpiles are dwindling of both crude and refined products like avgas and gasoline.

Lastly, if the Strait opened tomorrow it's likely going to take years for oil to reach pre-war price levels and a lot of the problems over the next year or more are already baked in. A whole bunch of harvests have missed being fertilized so you will likely find that tens of millions of people are going to suffer from famine regardless of what happens now.

A lot of professionals are coming to the realization that financial markets are in denial about how bad this is and are going to be (eg [4]).

[1]: https://en.wikipedia.org/wiki/API_gravity

[2]: https://www.csis.org/analysis/how-interpret-wartime-oil-pric...

[3]: https://www.iea.org/news/iea-member-countries-to-carry-out-l...

[4]: https://oilprice.com/Energy/Energy-General/Is-Reality-Finall...