Donald Trump said it was “highly unlikely” he would order further US strikes on Iran if negotiations advance on Tehran’s nuclear programme and the reopening of the Strait of Hormuz, according to CNN. He conditioned any restraint on Iran signing what he called a “very strong agreement”, while adding he would act again “if necessary” after saying previous strikes “hit them really hard”. Diplomatic efforts drew renewed attention after last week’s US midterm elections, with Qatar, the main mediator, saying Iran was reviewing proposals related to its nuclear programme.
Iranian Foreign Minister Abbas Araghchi said mediators had made no progress and taken no action in recent days since the US elections, arguing the election outcome has paused their work and that Tehran must wait for talks to restart. Iran’s Islamic Revolutionary Guard Corps said two oil tankers were burning after striking naval mines in and near the Strait of Hormuz. Reuters also reported that production was halted at Iraq’s Khor Mor gas field in the Kurdistan region following a drone attack. In the Gulf, Iranian-backed Houthis in Yemen damaged a landmark in Saudi Arabia’s capital financial district, while offices at Saudi Aramco sustained minor damage during a new barrage of ballistic and cruise missiles on Sunday.
Implications For Energy Markets And Derivatives Trading
We advise derivative traders to prepare for sharp, short-term price swings in crude oil contracts over the coming weeks. While political signals hint at potential diplomatic talks, immediate threats to the Strait of Hormuz—which carries nearly 20% of the world’s daily petroleum consumption—create high risk for sudden supply squeezes. We recommend utilizing long call options or straddle strategies to capture upside spikes while limiting downside risks if talks unexpectedly resume.
We must also monitor natural gas derivatives closely following recent supply disruptions in northern Iraq. Drone strikes on key production infrastructure like the Khor Mor field historically trigger sharp, immediate rallies in regional energy benchmarks. Holding bullish options on gas futures provides a direct way to capitalize on potential regional outages.
Safe-Haven Demand And Risk Management Strategies
Beyond energy, we expect safe-haven assets to see increased demand as escalations hit major commercial hubs in the Middle East. Historically, acute geopolitical crises in the Gulf drive the CBOE Volatility Index above 20 and can propel gold futures upward by 3% to 5% in just a few trading sessions. We suggest using gold calls and broad index hedges to protect portfolios while diplomatic mediators work to restart talks.
