Major US commodity houses faced steep losses exceeding $10 billion as oil markets whipsawed following the outbreak of war in Iran. More than 100 fuel tankers became stranded in the Gulf, triggering violent price spikes that reversed prevailing market expectations.

The disruption cascaded through physical oil markets, where pre-sold cargoes couldn't be delivered as shipping lanes clogged. Traders faced a double bind - obligated to fulfill contracts while their original shipments sat immobilized, forcing expensive replacement purchases at inflated prices.

"Early losses ran into the billions," confirmed Alexander Franke of Oliver Wyman's risk practice. Market participants had overwhelmingly positioned for declining prices before geopolitical shocks sent crude surging in the opposite direction.

While firms including Vitol, Trafigura and Mercuria later recouped some losses, initial hits were severe enough to trigger margin calls across the sector as Brent futures gapped higher. The episode serves as a stark reminder of how quickly conventional wisdom can unravel in commodity markets.