Here's a puzzle for you: oil prices have shot up about 60% since the war with Iran began, effectively closing the Strait of Hormuz. You'd think the market has priced in the chaos, right? Not so fast, says Chevron Corp. (CVX) CEO Mike Wirth. He thinks the futures market is still disconnected from the real, physical shortages rippling across the globe.

Speaking at an energy conference in Houston on Monday, Wirth laid it out plainly. "The fundamentals are very tight out there," he said. "The markets are trading on scant information." The strait isn't just a waterway; it's a superhighway for about 20% of the world's daily crude oil and liquefied natural gas. Shut it down, and you don't just lose oil. You also choke off critical flows of fertilizer for agriculture and helium for semiconductor manufacturing. It's a supply crunch with multiple heads.

This isn't just an oil company executive worrying about his own business. The effects are already cascading. Last week, United Airlines (UAL) CEO Scott Kirby painted a nightmare scenario: oil at $175 a barrel, which would add a staggering $11 billion to the airline's annual fuel bill. United is already reacting by cutting its scheduled capacity by about 5% for the next two quarters. When airlines start shrinking because of fuel costs, you know the problem is real.

And the problem is particularly acute in Asia. Wirth pointed out that the region is already facing such severe supply shortages that emergency releases from government reserves can't quickly fix it. The response on the ground tells the story: energy conservation mandates, school closures, and work-from-home measures are now in effect. "Physical supply changes don't respond immediately," Wirth cautioned. "Even when the strait reopens at some point, it will take time." So, don't expect a quick return to normal whenever the geopolitical dust settles.

Speaking of emergency measures, the world is trying to tap its rainy-day fund. The International Energy Agency has authorized the release of 400 million barrels from emergency storage globally. The U.S. is doing its part, starting to withdraw 172 million barrels from its Strategic Petroleum Reserve on March 20 at a rate of at least 1 million barrels per day. It sounds like a lot, but here's the catch: it still falls well short of offsetting the more than 11 million barrels per day that are currently offline because of this crisis. The supply cuts from producers are steep. The UAE has slashed output by more than 50% this month. Iraq and Kuwait have made even deeper reductions.

All this makes for a jittery market that swings on every headline. Oil prices dipped on Monday after news that a threatened strike on Iranian energy infrastructure was delayed by five days to allow for negotiations. Then, prices jumped back up when Iran denied that any talks had even taken place. It's a classic case of the market trying to guess the next move in a high-stakes game.

By early Tuesday, U.S. benchmark WTI crude futures were hovering around $89 per barrel. The global benchmark, Brent crude, had clawed its way back above $100, trying to recover from an over 11% drop in the previous session. It's a volatile ride, and according to the CEO of one of the world's largest oil companies, the traders might not even have the full map for where they're going.