What I heard from friends last week: Gas is $3.79 in Charleston. It's $6.04 in Los Angeles.

If you run a business that depends on driving, delivering, or shipping anything — you already know this.

What you might not know is how many things moved before the price at the pump did.

Position: the pump price

What you notice first. The national average hit $4.16 last week — the highest since August 2022. It started the year at $2.81. A 47% increase in three months.

Diesel is worse. In some states it's above $5. In Connecticut, it jumped 30% in a few weeks — from roughly $5 a gallon to nearly $6.80.

Most business owners are reacting here. At this layer. Watching the number on the sign outside the gas station and adjusting.

But position is the last derivative. It's the end of the chain, not the beginning.

The question worth asking: what moved first?

Going upstream

Let's walk backwards from the pump.

Velocity: crude oil

Crude represents roughly half the cost of a gallon of gas. When crude jumps $10 a barrel, pump prices rise 20 to 30 cents — but it takes two to three weeks to arrive.

Before the strikes on Iran, crude was trading in the mid-$60s per barrel. Within 10 days, it surged 28 to 35%. It's been above $100 since March 8th.

If you were watching crude in early March, you had a two to three week head start on what the pump would do in late March.

Acceleration: tanker traffic

Crude oil moves on ships. Through the Strait of Hormuz — a 21-mile-wide passage between Iran and Oman where one-fifth of the world's oil flows every day.

Before the war, more than 100 vessels transited the strait daily. After the strikes on February 28th, that number dropped to four on the first Sunday. Then effectively zero.

Four hundred loaded tankers are currently waiting inside the Gulf to get out. Only about a hundred empty ones are waiting to get in. Even if the strait opened today, analysts estimate it would take until July for oil flows to return to normal.

Jerk: insurance

This is the one almost nobody talks about.

The ships didn't stop because of missiles. They stopped because underwriters pulled their coverage.

War risk insurance premiums jumped from about 0.2% of a ship's value to over 1% in 48 hours. For a typical liquefied natural gas carrier worth $150 million, that's an extra $1.5 million per voyage. One crude tanker's insurance premium — $7.5 million — actually exceeded its freight cost of $6.5 million.

It cost more to insure the trip than to make the trip.

War risk underwriters can cancel coverage with just 7 days' notice under Lloyd's terms. Forty-eight hours under US policy wordings. On March 1st, the major Protection and Indemnity clubs issued cancellation notices. By March 5th, existing war risk coverage in the Persian Gulf was void.

The strait was, as one risk analyst put it, "de facto closed given that insurance companies stopped insuring transiting vessels." Before Iran physically blocked anything.

Insurance moved before the ships stopped. The ships stopped before crude spiked. Crude spiked before the pump price caught up.

Snap: the war zone designation

I usually stop at jerk — four layers deep. But today let's go to snap and crackle. Physicists have a sense of humor. We’ll skip Pop for today.

Before the insurers pulled coverage, a committee acted. The London Joint War Committee — a body of Lloyd's underwriters — expanded the designated war zone list. That designation is the trigger. When a region goes on the list, the cancellation clauses activate. The premiums spike. The ships stop.

A committee decision in London determines what happens weeks before a gas station in Charleston changes its sign.

Crackle: GPS

Before any tanker was physically hit, ships near the Iranian coast reported widespread GPS spoofing and jamming. Their navigation systems were being disrupted. Insurers started pricing in what they call "non-kinetic" war risk — damage that doesn't require a missile. This was the precursor to the war zone designation.

A GPS signal goes wrong near a shipping lane. An insurer in London adds a risk premium. A ship owner cancels a voyage. A crude futures contract spikes. A refinery pays more. A wholesaler raises the price. A gas station changes its sign. You fill up the truck.

This chain runs in peacetime too. Every commodity has one. You just can't see the layers until something breaks.

Downstream: the cascade

The pump price is also not the end. It's the middle. Here's what happens next.

First order implications: your fuel costs

USPS has asked for an 8% surcharge on package and express deliveries. A moving company owner in Tampa says fuel went from 3 to 5% of revenue to 6 to 10% since the war started. He doesn't feel like he can raise prices. His customers would trade down to cheaper options — or just ask friends with pickup trucks.

A pizza shop owner in Connecticut whose business is 60% delivery is paying drivers extra per delivery and watching his margins shrink. A food truck operator in Hartford saw weekly fuel costs jump from $300-400 to $600-700. He's considering selling his truck if it gets worse.

Second order implications: your suppliers' costs

Diesel is the invisible fuel of the supply chain. Tractors run on diesel. Trucks run on diesel. Refrigerated trucks — the ones carrying your fresh produce and meat — use even more. Perishable items feel it first. The USDA's forecast for food-at-home price increases in 2026 is now 3.1% — nearly double their projection at the start of the year.

Third order implications: your customers' wallets

And your customers are paying for all of it at the same time. The March inflation report showed consumer prices rising 0.9% in a single month — the largest monthly jump in nearly four years. Gas prices alone rose 21.2% in one month. The largest monthly increase since the Bureau of Labor Statistics started tracking the number in 1967. That's less money for everything else. Including whatever you sell.

The agreements underneath

In Issue #4 of this report, I wrote that the economy runs on agreements, not laws.

The Strait of Hormuz is an agreement. It was open because enough parties found it useful to keep it open. That's not a law of physics. It's a choice — and choices can change overnight.

Marine insurance is an agreement. Ships sail because underwriters agree to cover them. When the underwriters withdraw, the ships stop, regardless of whether the water is safe.

The ceasefire is an agreement. And right now, the rate of change depends entirely on whether that agreement holds. As of this writing, peace talks have broken down and the US Navy is enforcing a blockade on Iranian ports. Oil futures jumped nearly 8% overnight.

Every link in this chain is an agreement. Not a single one is guaranteed.

The jerk signal

The rate of change of acceleration depends on trust. Tanker operators won't re-enter the Gulf until they trust the ceasefire. Insurers won't restore pre-war rates until they trust the stability. Refineries that shut in production need time to restart. Even in the best case — strait opens tomorrow — it takes until July for flows to normalize. Every diplomatic meeting, every failed negotiation, every naval maneuver changes the jerk signal.

Your five-minute practice this week

Pick the biggest fuel-dependent cost in your business. It might be obvious — your delivery fleet, your commute, your shipping. Or it might be hidden — your food costs, your supplier surcharges, the fuel surcharge buried in your freight invoices.

Now walk upstream from it.

What you pay at the pump is position.

Crude oil price is velocity. You can check it in 30 seconds. If crude is rising, your costs are going up in 2-3 weeks even if the pump price hasn't moved yet.

Shipping disruptions and insurance are acceleration. You won't watch Lloyd's war zone designations. But you can watch whether the Strait of Hormuz is open. If tankers aren't moving, supply is tightening regardless of what crude is doing today.

And the agreement underneath — the ceasefire, the diplomatic talks, the naval posture — that's jerk. It's the signal that tells you how fast all of this could change again.

You don't need to become an oil analyst. You need to know that the price on the sign outside the gas station is the last thing to move. Everything upstream moved first.

Now take it further. Paste this into your AI tool of choice:

I run a [type of business] in [location]. My biggest fuel-dependent costs are [list them — delivery, shipping, food supplies, commuting employees, and any others you suggest based on my type of business].

First: Walk me upstream from the pump price. What's the chain of signals that moves before my costs go up? Where's the earliest warning I could watch?

Second: What are the first, second, and third order implications of fuel costs increasing on my business?

Third: Summarize in a table: each implication, the estimated cost impact, and the timeline before I feel it.

Fourth: Based on all of this, what's the 80/20? Which one or two actions would cover the most risk with the least effort? How should my pricing be adjusted and why? How often should I be revisiting this pricing?

The JERK Report is a weekly signal read for small business owners. One signal. Four layers. A five-minute practice. Every Monday.

From Rose Thun at Design Rosetta.