Nournews: About 20 days after the illegal US-Israeli aggression against Iran and the decisive action of our armed forces in intelligently managing the Strait of Hormuz, it has become clear to the world that the outcome of this asymmetric conflict will be determined in the Strait of Hormuz. Uncontrolled energy price growth and its direct and rapid impact on other markets, alongside the refusal of various countries to participate in US efforts to alter traffic in the strait—which is now under Iranian management—have intensified global pressure on the US to end the war.
In this context, the US, unable to effectively control energy prices and their consequences, has resorted to illegal and largely ineffective measures to manipulate the psychological effects of rising prices. One key tool of this psychological warfare is the stabilization of Brent oil at around $108–$109 in media reports—a figure that reflects financial and futures trading more than the actual deliverable price of oil.
Distinguishing the Financial and Physical Oil Markets
Currently, the most important factor in energy market analysis is the distinction between the “financial oil market” and the “physical market,” over which the US cannot exercise decisive influence. Prices like Brent and WTI reported in the media are mostly paper-based and often do not reflect real oil prices. In contrast, the physical market, especially Oman and Dubai benchmarks, reflects the real deliverable oil prices.
With restricted tanker passage in the Strait of Hormuz, actual oil supply has decreased, and geopolitical risk has risen sharply. This has caused physical market prices to spike to $150–$155 (and even higher in some trades), highlighting that media-reported prices primarily serve a psychological function rather than reflecting reality. The gap arises because “deliverable” oil has become scarce and highly competitive due to passage limitations and increased risk.
Hormuz: Geopolitical Chokepoint and Price Determinant
As a vital artery of global energy transport, the Strait of Hormuz has become the key variable in determining oil prices and the outcome of the US-Israeli-imposed conflict on Iran. Tanker passage restrictions, rising security risks, and supply chain disruptions have created real supply bottlenecks.
In this context, major Asian buyers such as China, India, Japan, and South Korea have entered intense competition to secure energy. This competition has not only raised prices but also turned access to physical oil into a strategic advantage. Consequently, the real delivered oil prices for these countries have diverged significantly from paper-based prices.
Hidden Costs: From Shipping to Insurance
One often overlooked aspect of the crisis is the rise in ancillary costs. In wartime conditions, maritime freight costs have risen sharply due to security risks, ship shortages, and higher insurance rates.
Thus, if physical oil prices are around $155, shipping and insurance alone add $10–$20 per barrel. As a result, the final cost for refineries in East Asia reaches approximately $165–$175 per barrel—reflecting the real energy price in the global economy and forming the basis for product pricing. Meanwhile, the reported price of $108–$111 has little connection to actual energy costs.
The US has attempted to manipulate prices and report paper-based rates to prevent the psychological effects of real prices from affecting markets, but Washington’s inability to manage passage in the Strait of Hormuz has rendered these efforts ineffective. Therefore, the gap between nominal and real prices continues to widen.
Breaks in Product Pricing Chains
Recent developments have disrupted the traditional relationship between crude oil and refined products. Under normal conditions, product price margins were limited—for example, the pre-war crack spread for gasoline was around $10–$20 and for diesel $15–$25.
Now, this relationship has broken down. Jet fuel prices have surpassed $200, creating a gap of over $100 with crude oil, indicating severe shortages. Diesel has also faced supply constraints, with a price difference of $40–$70 compared to crude. Gasoline has increased but remains closer to crude than other products.
These developments show that crude oil alone no longer determines prices; variables such as transport disruptions, refinery capacity limits, and geopolitical risks now play the central role.
The Hidden Reality Behind Reported Figures
Today, the energy market exhibits a deep “price duality”: on one side, media-reported financial market prices (around $111) serve psychological purposes, and on the other side, real physical market prices (around $155 and up to $175 for end consumers) are shaped by limited supply, high risk, and rising costs.
This gap not only reflects the inefficiency of traditional pricing mechanisms but also shows that geopolitics has once again become the determining factor in energy economics. Under these conditions, end consumers feel the real effects not through media numbers but through higher fuel costs, shipping expenses, and general inflation. In simple terms, today’s real oil market is far more expensive than what is displayed on screens.
NOURNEWS