(Bloomberg) — Oil swung sharply between gains and losses on speculation the US may join the Middle East conflict, with traders focused on flows through the region’s vital shipping chokepoint.

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Brent futures (BZ=F) traded above $76 a barrel, about $7 higher than they were before the attacks. Iran’s Supreme Leader Ayatollah Ali Khamenei said his country won’t surrender to Israel after US President Donald Trump called for the Islamic Republic’s capitulation as the conflict enters its fifth day.

Trump demanded Iran’s “UNCONDITIONAL SURRENDER” and warned of a possible strike against the country’s leader in social media posts on Tuesday. The US is also moving more military assets into the region, including the USS Nimitz aircraft carrier strike group, which is sailing to the Middle East ahead of schedule.

The oil market’s main concern is the threat to vessel traffic in the Strait of Hormuz, through which about a quarter of the world’s crude shipments flow, and to supplies from Iran itself. However, early data from TankerTrackers.com Inc. show that Iran has actually increased its exports significantly in the days since attacks began, and there’s been no major disruption to Hormuz.

The risks to prices have permeated across the oil derivatives market. Bullish options are fetching their biggest premiums in over a decade and volatility has surged to a three-year high. The cost of shipping crude from the Middle East to China is also up more than 50% since the attacks began.

The hostilities have also rattled wider markets, with investors seeking havens in assets like gold.

“Oil remains on edge and the worst case scenario is the closure of the Strait of Hormuz,” said Keshav Lohiya, founder of consultant Oilytics. “There is a huge fat tail risk in the oil and shipping world.”

Israel launched surprise airstrikes on Iran’s nuclear sites late last week, but American weapons are seen as crucial to achieving a more complete destruction of Tehran’s atomic program than anything it can do alone.

Oil could break above $80 a barrel on headlines of US involvement, said Chris Weston, the head of research at Pepperstone Group Ltd. The shape of the futures curve suggests that traders are pricing in a much tighter market, he added.

The gap between Brent’s two nearest December contracts — a key indicator on long-term balances — has significantly widened since the attacks and was almost $3 a barrel in a bullish backwardation structure. Prior to the conflict, it was in a bearish contango pattern, signaling expectations of ample supply.