If you look at the stock market today, you might naturally conclude that the global energy crisis has been permanently resolved.

The S&P 500 recently hit another record high, climbing past where it was before the fighting began in late February.

Equity traders seem to have decided that a war in the Middle East, one that has closed

the world's most critical energy choke point, is simply a great opportunity to buy the dip.

But if you talk to the people who actually move physical barrels of oil, the mood is considerably

darker. Futures markets are pricing in a swift diplomatic resolution, while

physical commodity traders are staring at a completely different reality. There's a massive

gap between the optimistic news flow that drive stock prices and the actual cost of a physical

barrel of oil sitting on a ship in northwest Europe.

For weeks we've seen a bizarre cycle play out.

A ceasefire or diplomatic breakthrough is announced, the stock market spikes and the price

of crude plunges by 10%.

Then almost immediately the Iranians announce that they have not agreed to anything

and prices reverse.

Just this week, despite the announcement of a three-week ceasefire extension between Israel and Lebanon,

Iranian forces boarded and seized two MSC container ships. President Trump responded by ordering the US Navy

to shoot and kill any boat caught laying mines in the water. This is not what a functioning

trade route looks like. Investors seem to be suffering from a bad case of muscle memory. They're

sitting at comfortable desks

in New York and London, assuming that the administration will eventually experience

what investors have been calling a taco moment, where taco stands for Trump always chickens

out. They expect the president to look at the upcoming midterm elections, look at the rising

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