US President Donald Trump said on Tuesday that a covert US military operation supported commercial shipping through the Strait of Hormuz during tensions involving Iran. He said the mission was ordered last month to assist oil tankers and other merchant vessels transiting the waterway.<\/p>\n
Trump said the effort enabled more than 100 million barrels of oil to pass through the Strait and reach global markets. He also said more than 200 commercial ships completed the transit safely.<\/p>\n
We recall past events where US military intervention ensured the safe passage of over 100 million barrels of oil through the Strait of Hormuz. This history shows a clear precedent for de-escalating tensions and protecting the global energy supply. We believe this pattern is important for assessing the current market environment.<\/p>\n
Recent rhetoric from Iranian officials in late May 2026 has caused a significant spike in oil prices, with Brent crude briefly touching $95 a barrel. This has pushed implied volatility on front-month Brent options to a 12-month high of 45, according to CBOE data. Shipping insurance premiums for the region have also doubled, reflecting the market\u2019s anxiety.<\/p>\n
Given this historical context, we feel the current risk premium is overstated and presents an opportunity. We see value in selling out-of-the-money call options to collect this inflated premium. This strategy is based on the expectation that any potential disruption will be met with a swift stabilizing force, causing prices to recede from their highs.<\/p>\n
Furthermore, we anticipate that implied volatility will fall sharply in the coming weeks as the situation clarifies. Positioning for this through strategies like short straddles or put spreads could be profitable. The market is paying too much for protection against an outcome we view as unlikely based on past actions.<\/p>\n
The Strait of Hormuz is responsible for the transit of about 21% of the world’s daily petroleum liquids consumption, so price reactions are always sharp. However, historical data shows that once US naval presence becomes visible during these flare-ups, the geopolitical premium can erode by $5 to $10 a barrel within weeks. We expect a similar response and market reaction this time.<\/p>\n","protected":false},"excerpt":{"rendered":"
Trump says covert US mission safeguarded Hormuz shipping, moving 100 million oil barrels; market volatility may be overstated.<\/p>\n","protected":false},"author":87,"featured_media":52964,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-52328","post","type-post","status-publish","format-standard","has-post-thumbnail","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