What is the TACO trade and are investors profiting amid war on Iran?

Global energy crisis continues to widen amid market volatility, while so-called ‘TACO traders’ attempt to capitalise.The whirlwind of uncertainty in the oil markets has continued this week as the United States-Israel war on Iran approaches the one-month mark.The Strait of Hormuz remains effectively closed, and the impact of the global energy crisis is broadening. From Asia to Europe and beyond, the economic outlook is darkening.Recommended Stories list of 4 itemslist 1 of 4Saudi, UAE, Iraq: Can three pipelines help oil escape Strait of Hormuz?list 2 of 4Is Europe heading to an energy crisis?list 3 of 4FBI director Kash Patel’s emails, photos hacked by Iran-linked grouplist 4 of 4Iran’s football team honours children killed in Minab school airstrikeend of listOn Wednesday, Japan began its biggest release of national oil reserves – some 80 million barrels will be given to refiners, enough for 45 days. The country imports 90 percent of its crude oil from the Middle East.On Thursday, the Organisation for Economic Co-operation and Development (OECD) warned the conflict would damage the United Kingdom more than any other major economy, predicting that inflation would hit 4 percent this year.Speaking at a meeting of G7 foreign ministers in France, UK Foreign Secretary Yvette Cooper said Iran cannot be allowed to hold the global economy hostage.Amid the uncertainty, further turmoil has been created by Donald Trump’s messaging, which has not always been consistent.In one of the most recent examples, at the start of the trading week on Monday, there were less than 12 hours remaining on Trump’s original 48-hour deadline for Iran to reopen the Strait of Hormuz.But just before the period expired, he extended the deadline by five days, and later promised to hold off from attacks on Iran’s energy facilities for an additional 10 days to allow for further “constructive conversations”.Observers say this type of about-face, which Trump repeatedly made over the past year amid his threats to impose steep tariffs on countries around the world, has opened the door to investors willing to bet that the US president will back down.