WTI crude traded near $95.70 per barrel on Monday, up 5.90% on the day. Prices stayed below $100 and remained under last week\u2019s peak above $106.<\/p>\n
The move followed renewed tension around Iran and the Strait of Hormuz. The US President ordered the US military to block vessels linked to Iranian ports from 10:00 Eastern Time on Monday.<\/p>\n
The Strait of Hormuz carries about 20% of global oil supply. Standard Chartered reported the route has been effectively closed since late February, with tanker traffic falling and Gulf crude exports down about 43% between February and March, leaving around 11 million barrels per day effectively offline.<\/p>\n
Peace talks between Washington and Tehran reportedly broke down over the weekend. A two-week ceasefire remained in place.<\/p>\n
Saudi Arabia restored full capacity on its East-West pipeline to about seven million barrels per day. This offers an export route via the Red Sea and may reduce reliance on Gulf shipping routes.<\/p>\n
The immediate jump to $95.70 shows how seriously the market is taking this blockade threat, but the failure to reclaim $100 shows traders are still weighing the chance of a diplomatic solution. This push and pull between a potential supply shock and hopes for de-escalation is a formula for high volatility in the weeks ahead. Derivative traders should prepare for sharp price swings in either direction rather than a steady trend.<\/p>\n
We see a clear risk of prices spiking well above last week’s $106 high if the US enforces the blockade and the ceasefire collapses. Looking back from our perspective in 2025, we recall how the 2019 tanker attacks in the same region caused a nearly 20% price surge in a single day. With recent EIA data showing global spare production capacity is already tight at just 2.1 million barrels per day, the market is far more sensitive to the threatened 11 million bpd disruption.<\/p>\n
On the other hand, a breakthrough in negotiations could send prices falling back toward the low $90s just as quickly as they rose. The fact that Saudi Arabia can reroute up to 7 million barrels per day through its East-West pipeline provides a significant, though partial, buffer against a full Hormuz closure. This potential for a rapid price collapse makes holding outright long positions risky without protection.<\/p>\n
Given these opposing forces, the most direct trade is on volatility itself. We expect the CBOE Crude Oil Volatility Index (OVX), which has already jumped to 55, to remain elevated as uncertainty reigns. Strategies like long straddles or strangles, which profit from a large price move in either direction, appear well-suited for a market balanced on a geopolitical knife’s edge.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" WTI rose 5.9% near $95.70 as Hormuz tensions and shipping curbs threaten supply; Saudi pipeline restored.<\/p>\n","protected":false},"author":87,"featured_media":0,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-50810","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t