Hormuz remains disrupted, ships are still being attacked, Bab al-Mandab is under pressure, and there's no end in sight, yet the oil market looks strangely calm.
Economist Philip Pilkington says that's the problem.
His argument is that the paper oil market is no longer accurately communicating what's happening in the physical economy.
Treasury Secretary Scott Bessent has become extremely effective at keeping markets calm.
Headlines about an "oil glut," negotiations and de-escalation feed algorithmic trading systems.
Large sell orders appear during thin trading periods, helping trigger momentum algorithms and drive prices lower.
Philip even has a name for the mysterious big player he sees repeatedly appearing in these markets: the "Whale of Hormuz."
He suspects the intervention is coming from Washington, although he stresses that's his interpretation of the trading patterns rather than something publicly established.
And here's the extraordinary part: he thinks Bessent may be too good at his job, because every time the Treasury successfully suppresses the market reaction, Trump gets another signal that everything is fine.
Oil hasn't exploded, stocks haven't collapsed, and the economy is still standing, so why end the war?
Philip says the financial system that should be screaming at Trump to change course is instead lulling him to sleep.
Meanwhile, the actual economic pressure hasn't disappeared; it's simply leaking out somewhere else.
Refining margins have blown out, gas is becoming more expensive, food prices are rising, and America's 30-year Treasury yield is pushing toward levels he considers deeply alarming.
His fear is that eventually the gap between the paper economy and the physical economy becomes impossible to hide.
Iran may understand this better than anyone.
Philip believes Tehran's strategy is increasingly becoming: Don't give Trump the deal he wants, keep the economic pressure running, make him pay in the midterms, and if necessary, wait until he's gone in 2029.
But Philip thinks the consequences could eventually become much bigger than Trump's presidency, because underneath all of this sits the dollar.
China has spent years quietly building the infrastructure for greater international use of the renminbi.
Offshore liquidity already exists, trade settlement is expanding, Western institutions have issued Panda bonds, and Chinese borrowing costs can be dramatically lower than equivalent dollar financing.
Philip's point is that China doesn't need to overthrow the dollar overnight; it just needs businesses and countries to reach the point where using something else makes more economic sense.
And every crisis Washington creates makes that calculation easier.
@philippilk
