Chevron Corp. (NYSE:CVX) CEO Mike Wirth said Monday that oil and gas futures prices remain disconnected from the physical supply shortages rippling through global markets following the effective closure of the Strait of Hormuz, even as prices have climbed roughly 60% since the Iran war began.

‘Fundamentals Are Very Tight’

Speaking at CERAWeek by S&P Global in Houston, Wirth said the supply disruptions from the strait’s closure, which typically channels close to 20% of the world’s daily crude oil and liquefied natural gas, have not been fully reflected in market prices.

“The fundamentals are very tight out there,” he said. “The markets are trading on scant information.”

Wirth noted that critical flows of fertilizer for agriculture and helium for semiconductor manufacturing also pass through the strait, compounding the supply crunch.

The comments come as United Airlines (NASDAQ:UAL) CEO Scott Kirby warned last week of a $175-per-barrel oil scenario that could add roughly $11 billion to the carrier’s annual fuel bill, after the Chicago-based carrier said it would cut scheduled capacity by about 5% in the second and third quarters.

Asia Shortfalls, Slow Recovery Ahead

Asia is already facing acute supply shortages that emergency reserve releases cannot quickly reverse, Wirth said, pointing to energy conservation mandates, school closures, and work-from-home measures now in effect across the region.

He cautioned that even a reopening of the strait would not bring immediate relief: “Physical supply changes don’t respond immediately. Even when the strait reopens at some point, it will take time.”

SPR Releases, Gulf Cutbacks

The International Energy Agency (IEA) has authorized the release of 400 million barrels from emergency storage globally, including 172 million barrels from the U.S. Strategic Petroleum Reserve, with withdrawals beginning March 20 at a rate of at least 1 million barrels per day.

That still falls well short of offsetting the more than 11 million barrels per day currently offline. The UAE has cut output by more than 50% this month, with Iraq and Kuwait making even steeper reductions.

Oil prices dipped on Monday after President Donald Trump delayed a threatened strike on Iranian energy infrastructure by five days to allow for negotiations. Iran subsequently denied that any talks had taken place, sending oil prices up again.

Price Action: At 6.20 AM ET, WTI crude futures were hovering around $89 per barrel, while benchmark Brent futures were back up above $100, having fallen over 11% in the previous session.

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