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Oil markets have been lurching up and down as the U.S. and Israeli bombing campaign against Iran shuts down shipping in the Persian Gulf. Tankers have been delayed, governments are releasing strategic reserves, and traders are reacting with jitters to every new headline from Washington. The consequences go far beyond gasoline prices. Oil is the raw material for everything from plastics to fertilizers, with shocks rippling through global supply chains and inflation. To understand what is driving the volatility — and what might happen next — we spoke with Anas Alhajji, managing partner at Energy Outlook Advisors, and a longtime analyst of global oil markets.

Oil prices have been swinging dramatically. Four out of five barrels of oil do NOT move through the Straits of Hormuz. If countries and refineries hold weeks of reserves, why are markets reacting so violently? 

Too many factors affect price. People act on the news only to discover it was fake or inaccurate, or market manipulation by the Trump administration. These trades are done within seconds. So, when the President made that statement [about ending the war soon], prices went down by about $20. Then people realized that his statement was incorrect. So the price went up again. When the Secretary of Energy made that claim that tankers were being escorted by the U.S. Navy, and a few minutes later deleted the tweet, well, within those few minutes, prices plummeted $18 and then bounced back.

The U.S. has announced a 3-month series of releases from the Strategic Petroleum Reserve. And under the International Energy Agency, many other countries are doing the same. How does that affect prices?

Think about it this way. They are going to flood the market with 2 million barrels a day [that’s about 10% of daily U.S. demand] for 120 days. It will keep prices lower, and if the war ends this week, and they continue releasing oil from the SPR for the next three months, the price could drop to $50 by the fall. And because the government is selling it at $90 or $95, they’ll be able to buy it back to replenish the reserve at $50 and $60 and $70. That’s a deal! Biden was buying it at $79. 

If the war ends quickly, would the oil crisis end quickly as well?

If the war ends tomorrow, the crisis will not end tomorrow. If the war ends tomorrow, we still have problems because we need to get all those ships out of the Gulf. And then we need to bring back production that's being shot at, and that takes time. So ending the war does not end the crisis. To bring back oil and LNG production to pre-crisis levels will take a few months.

What does this disruption mean for the global economy?

The insurance fiasco that closed the Strait of Hormuz is affecting the whole world, and the ripple effects will reach the US even if there are no direct effects. We will see rising inflation and interruption of supply chains.

Does this crisis accelerate the shift away from oil toward other energy sources?

No, but some energy sources will benefit here in the US and overseas, such as coal. But it’s not enough of a shock to end our oil reliance.

Who ultimately benefits from the current turmoil?

Russia was selling its oil and gas and LNG at a discount. And now, because they are not limited, because they can add production and send it anywhere in the world, and because the prices of oil and LNG went through the roof, to the extent that it was sold at a discount, now it's selling at a premium. [So,] the two main winners in this crisis are Trump and Putin. Putin benefits by selling more oil, gas, and LNG at very high prices. The loser is the rest of the world, especially the Arab oil-producing countries, the EU, and India

What should investors and policymakers watch most closely now?

We want to see whether the war ends or not. This is really the major, major issue. And if the risk remains, then the problems will remain.

Big Businesses mentioned this week:

$GOOG ( ▼ 1.68% )  $DIS ( ▼ 1.32% )  $NFLX ( ▼ 0.61% )  $ORCL ( ▼ 2.51% )  $NVDA ( ▼ 1.53% )  $BA ( ▼ 3.63% )  $XOM ( ▲ 1.96% )  $TSLA ( ▼ 2.6% )  $CVX ( ▲ 2.9% )  $HAS ( ▲ 0.98% )  $MAT ( ▲ 0.56% ) $NVO ( ▼ 2.09% )  $HIMS ( ▼ 6.96% )  

This week, big business!

• The war story

• The usual suspects

• Trumplandia

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The war story

• Flooding the Zone? Even an agreement to release 400 million barrels, or about four days' worth of global demand, on world markets did nothing to keep the price of oil down, indicating markets and business fear the war with Iran will continue unabated. The 32 member-countries of the International Energy Agency agreed to release the oil from their reserves, though they gave no timetable, to try to avert a supply shortage and price hikes. The benchmark Brent crude price fell briefly before climbing more than 7% to close just above $95 a barrel. That’s up 30% since Feb. 26, just before the Iran war began. That’s largely because there’s simply no end in sight to the turmoil and disruption. “There is still a distinct lack of progress in terms of actual de-escalation, or in terms of transit through the Strait of Hormuz resuming in any meaningful manner,” analyst Michael Brown of Pepperstone wrote in a note to clients. 

• Wild Ride: Oil has been bouncing like my eight-year-old on a trampoline, as investors try to  The U.S. benchmark West Texas Intermediate has shot up by a third in the past month to $94.56 on Wednesday from $62.84 a month earlier, but with some wild swings, with both Brent crude and WTI hitting $119.5 a barrel in early trading on Monday, then plummeting, including a $11 drop on Tuesday from Monday’s close above $94 before shooting back up on Wednesday morning. Tuesday’s drop came after a post on X by U.S. Energy Secretary Chris Wright said the U.S. Navy had escorted a tanker out of the Gulf. The news was fake, and the post vanished in minutes, with the Administration walking it back and later blaming a social media staffer. But markets were left scratching their collective heads, and the Wall Street Journal reported that an unidentified oil futures ETF saw $84 million wiped off its market cap by the swing. Stocks have been a lot more stable - so far. Since markets opened after the U.S.and Israel first bombed Iran on Saturday, Feb 28, NY time, stocks have had some ups and downs on rumors the war might be quickly over, but after nearly two weeks, the S&P is down only 2.3%, while the Dow is down about 4% through midday Thursday.

• Prices up at the pump: Diesel and gasoline prices are rising across the U.S. as the air war with Iran continues, pushing up shipping and travel costs, a bad sign for retailers, commuters, manufacturers, and airlines. For American consumers, the direct hit is to gasoline. The national average jumped to $3.578 per gallon on Wednesday from $2.937 a month ago. Diesel prices at the pump were up 25%, or 96 cents a gallon, through March 9, to $485, according to the U.S. Energy Information Administration, the largest ever weekly hike. Price hikes for aviation fuel were even higher, with European jet fuel rising 80% by March 6. European fliers won’t see price hikes right away, though, as most airlines there lock in prices using futures contracts. But U.S. airlines rarely hedge, and they will see a quick hit to their bottom lines. For merchant ships, the price hike was just as bad, with bunker fuel jumping 33% to $861 a metric ton since Feb 26. That’s added a surcharge of about $17 per container to international shipping, and the war’s left most shippers again avoiding the Suez Canal for the longer, more expensive trip around South Africa that caused the last logistics crisis, when Houthi missiles shut the Suez route two years ago. 

• Russia’s energy rebound? Well, well, well, as they say in the oil business. One of the big winners in the nearly two-week-old U.S.-Israeli war on Iran is Russia, whose sanctioned oil is now trading above the price of benchmark crude. Despite sanctions, last year Russia was the world’s second-largest oil exporter, moving about 4.7 to 5 million barrels a day, behind Saudi Arabia’s 7.2 million and the U.S.’s 4.1 million a day. Russia’s benchmark Urals oil fell to about $85 a barrel on Wednesday, down 15% in a day, after peaking above $100 right after the war began, it’s still up 35% in a month. At 5 million barrels a day, today would have brought Russia’s state-controlled oil companies about $425 million. In one day. President Trump said he may lift oil sanctions on Russia to keep gas prices down, and the Treasury Secretary, Scott Bessent issued a 30-day sanctions waiver to let India buy Russian oil. "If you're a Russian oil trader or a Russian company, you have never earned as much money selling oil as right now because of this supply-chain interruption," Cornell professor and sanctions expert Nicholas Mulder told Axios.

The usual suspects

• Who’s the leader of the club? It ain’t Mickey anymore. YouTube is the world’s largest media company now, with the Alphabet $GOOG ( ▼ 1.68% ) subsidiary posting $62 billion in revenue last year, topping Disney’s $DIS ( ▼ 1.32% ) media haul of $60.9 billion, according to financial research firm MoffettNathanson. That’s also well above Netflix’s $NFLX ( ▼ 0.61% ) $45.2 billion in revenue. The money is coming from ads (more than $40 billion) and subscriptions, and MoffettNathanson says YouTube has plenty of room to grow in the so-called creator economy. Meanwhile, in a move that might cut down some of its revenue, YouTube announced a tech pilot to identify deep-fakes of celebrities and politicians, possibly easing removal of the videos.

• About that $WBD ( ▼ 1.33% ) Deal: A large part of the success of Paramount’s $PSKY ( ▼ 1.36% ) bid for Warner Bros. Discovery $WBD ( ▼ 1.33% ) relies on tens of billions of dollars of loans backed by the personal fortune of Larry Ellison, the Trump-buddy father of Paramount’s new CEO, David Ellison. Dad’s fortune comes from Oracle $ORCL ( ▼ 2.51% ) , the SaaS and cloud-computing firm that briefly made him wealthier than Elon Musk (for a day, last year). But Oracle’s stock has since plunged, and Ellison’s net worth, now at about $200 billion, is half what it once was, and alarm bells are sounding. The problem: Oracle is the only major player building or upgrading data centers with debt, and it’s also far behind the curve in hooking up its expensive Nvidia $NVDA ( ▼ 1.53% )  chips to actual electric power. That led OpenAI, which is investor-funded but also overstretched, to end plans to expand at Oracle’s Abilene, Texas, Stargate data center. Why? Because by the time it opens, Nvidia will have released a new and faster chip, CNBC reports, citing unidentified insiders. Oracle called the report “false” but offered no details. Oracle saw its shares bounce as much as 14% after releasing better-than-expected fourth-quarter earnings on Tuesday, but shares are still down 48% from their mid-September peak

• Boeing’s Bad Wires: Boeing’s $BA ( ▼ 3.63% ) ongoing battle to deliver its jets faster and more safely (remember the door plug that fell off that 737 back in January 2024?) has hit a small snag. The company says it found some wiring was scratched in undelivered 737s and traced the problem back to a machining error. The company didn't give many more details, but the delay could put a crimp in Boeing’s plans to deliver 500 of the popular 737 this year. Quality control has been the key focus of CEO Kelly Ortberg. Boeing plans to reopen a production line at its main factory near Seattle to cope with pent-up demand. Boeing shares fell 3.2% when the wiring problem was announced. 

• Seems like Exxon $XOM ( ▲ 1.96% )  just couldn’t take the heat. The world’s second-largest oil company says it’s leaving the home state of Bruce Springsteen and the Sopranos because it just can’t take the kind of shareholder abuse that gets dished out in its current home state of New Jersey. CEO Darren Woods told The Wall Street Journal he wants to protect the company from shareholder “abuse.” Exxon moved its HQ to Texas from New York City in 1989. “Texas is already our operating home, and we think it makes sense to make it our legal home,” Woods said. Companies including Elon Musk’s Tesla $TSLA ( ▼ 2.6% ) and Exxon rival Chevron $CVX ( ▲ 2.9% ) have moved to Texas, which is working hard to rival Delaware as a home for U.S. corporations. In 2024 it opened a business court, and last year, it passed laws that make it harder for shareholders to sue board members of Texas corporations.

• When times get tough, the tough start to play: That’s pushed up sales for toymakers, including Lego, the privately held Danish toymaker whose themed sets boosted sales 16%, while the overall toy market saw sales rise 7% last year. Hasbro $HAS ( ▲ 0.98% ) (Monopoly, Pay-Doh) saw revenue grow 12% last year, but Barbie-maker Mattel $MAT ( ▲ 0.56% ) saw profits and its share price plummet despite a 7% increase in revenue, with weak demand for its products. 

  

  A lego aircraft carrier, as opposed to the real kind.

• No Swift Justice for Live Nation: It looks like ticket and event supremos Live Nation $LYV ( ▼ 3.4% ) will walk away relatively unscathed from an anti-trust trial, after reaching tentative agreement with the U.S. Justice Department that will avoid a breakup of the $25-billion a year company. Live Nation said it will allow more artists and competitors access to the venues it controls, and cap ticket fees at 15%. It also sets aside $280 million for states to reimburse consumers for those fees. Still, it doesn't address one big issue - Live Nation subsidiary Ticket Master’s stranglehold on ticket sales, and the knock-on effect when its computer system failed, delaying the 2022 rollout of Taylor Swift’s Eras Tour. Lawsuits from Swifties prompted the DoJ suit, but the fans are unlikely to get a rebate.

• If you can’t beat ‘em: NovoNordisk $NVO ( ▼ 2.09% ) dropped its lawsuit against Hims&Hers Health $HIMS ( ▼ 6.96% ) , and agreed to sell its brand-name weight-loss drug Wegovy and its diabetes-treating companion drug Ozempic through the online pharmacy. Hims&Hers has used an FDA drug shortage exemption to market a compounded version of the GLP-1 drugs. The drugs will sell at Novo’s self-pay prices, from $149 to $499 a month, depending on dosage. HIMS shares were up a whopping 60% by midday Thursday. Novo’s shares are down 3.3% since the announcement.

Trumplandia

• The Fed’s Warsh Nightmare - It’s not looking good for Kevin Warsh, President Trump’s yet-to-be-confirmed nominee to take over as Fed chair. With recent dim employment figures, stubborn inflation, and the war on Iran with its skyrocketing oil and gas prices, Warsh is facing a dilemma. To tackle the Fed’s dual mandate of keeping employment high and prices low, he’s got just one tool: setting a benchmark interest rate. He can raise rates to fight inflation by making money harder to get (and spend); he can lower rates to boost spending and grow the economy (but that could create more inflation); or he could leave rates where they are and hope that the war fever winds down and the economy starts moving again. All while Trump wants Warsh to lead the Fed’s 12-member Open Market Committee on a mission to lower rates. “He’s got a perfect storm awaiting him here,” Troy Ludtka, senior U.S. economist at SMBC Nikko Securities, told CNBC. “We’ve got some significant stagflationary pressures, particularly from the manufacturing and goods sectors of the economy. This is coming at a time when it seems like we’re really beginning to see the consumer — I don’t want to say break — but maybe begin to break.”

• Droning On: President Trump’s entrepreneurial sons, Eric and Don Jr. are taking a stake in a drone company that’s seeking contracts from the Pentagon, after the Trump Administration banned Chinese drones. Powerus, a drone roll-up based near Mar-a-Lago is merging with a publicly traded golf-course holding company backed by the Trumps, Powerus executives told the Wall Street Journal. 

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Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.