A report from DBS Bank’s Group Research examines the potential impact of US actions in Iran on oil prices. Authored by Taimur Baig, Chief Economist, and Nathan Chow, Senior Economist, it suggests that oil could reach USD100 per barrel if the Iranian regime faces severe threats from US intervention.<\/p>\n
The report notes that while current sanctions might not heavily impact the oil market, any military action could increase prices. It states that geopolitical risks could disrupt easing global inflation pressures, potentially affecting oil stability.<\/p>\n
The possibility of a US attack on Iran looms, causing tension in the oil market. Even if immediate conflict is averted, market concerns might not be alleviated, indicating continued volatility in oil prices.<\/p>\n
At a time when we’ve seen global inflation pressures easing, oil has the potential to be a spoiler. With Brent crude already hovering near $88 this morning, up from $82 just two weeks ago, we consider scenarios around US intervention in Iran to be a primary driver of this tension. The market is pricing in a significant risk that was not present at the start of the year.<\/p>\n
A military response from Iran could push oil to $100 a barrel and beyond, which would severely disrupt global supply chains. The CBOE Crude Oil Volatility Index (OVX), a key measure of market fear, has surged to 45.6, its highest level in nearly a year, indicating traders are paying a premium for options. This shows a widespread belief that a large price swing is becoming more likely.<\/p>\n
Following last week’s naval standoff near the Strait of Hormuz, a US attack on Iran now looks more a matter of when, not if. This escalation has introduced a significant fear premium into the market. No wonder the oil market is so tense, with daily price swings exceeding 3% becoming the new norm.<\/p>\n
In this environment, traders should consider using long-dated call options to gain exposure to a potential price surge while defining their maximum risk. We are seeing a significant increase in open interest for May and June contracts with strike prices of $100 and $110. This allows a trader to profit from a sharp upward move without being exposed to the extreme volatility of holding futures contracts.<\/p>\n
We only have to look back to the market reaction in early 2022, as we reviewed throughout 2025, to see how quickly geopolitical events can re-price energy. During that period, Brent crude jumped over 30% in a matter of weeks as the conflict in Ukraine began. A similar rapid, headline-driven move is well within the range of possibilities now.<\/p>\n
Even a last-moment reprieve from immediate attacks may not soothe the oil markets in the coming weeks. The current geopolitical risk premium is now firmly embedded, meaning volatility is likely to remain elevated. Selling this volatility by writing uncovered call options would be an extremely dangerous strategy until there is a clear de-escalation.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" US-Iran tensions could spike oil prices to $100, driven by geopolitical risks and market volatility fears.<\/p>\n","protected":false},"author":62,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-40675","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/40675","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=40675"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/40675\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=40675"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=40675"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=40675"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}