I'm not smart enough to understand why - but surely this isn't sustainable? At some point wont the price not reflect the reality of simply not having gas to put in your car? What is going on... The price of oil went down 10% yesterday, opened +0% today and is back to +4%...

It is very difficult to ship and store oil in the volumes that are relevant to modern economies. We are very much in a situation where some regions are business as usual, some regions can't get oil at any cost, and some regions have so much oil they are stopping production because they don't have any where to store it.

In terms of how this impacts prices, the headline number is usually Brent crude, but there are a number of different "flavors" with various geopolitical factors that influence price[1]. For example, the US market is going to respond differently then the Indian market. The former is a net exporter halfway across the globe from the conflict area, the later gets a substantial portion of their oil through the Strait of Hormuz.

If the conflict carries on for a while things will probably normalize across markets as production and shipping adjust to the new reality. But in the short term you are going to have some folks mildly inconvenienced by slightly higher prices, while other folks might not even be able to fill their tanks.

[]1 https://oilprice.com/oil-price-charts/

Most oil benchmarks are futures contracts, so they don’t reflect the spot or current price. So commodities traders are trying to predict the situation 2-4 weeks from now

If you look at this as market manipulation as a method of generating (investment) returns, then it doesn't matter if your public lie only causes the prices to change for a day or two. As long as your people get in in the right direction before your announcement, and then get out right after the big swing, you win.

Who cares what the real price is, right? - especially when you've never pumped you own gas into your car, and you are so out of touch with normal life that you think life insurance costs $15 or $20 (I believe those were the numbers he threw out a few years ago on an interview.)

It's beyond simple supply and demand. This was in response to a social media post that had a tenuous relationship with reality (or 'fluid' as the Whitehouse now calls it).

Oil price is famously disconnected from how much is being pumped out of the ground at any given time. But eventually, yes, if the conflict lasts for long enough material reality will catch up with markets (or is it the other way around?).