Crude Oil prices recovered above $93.50 per barrel at the start of Friday\u2019s European session. The US benchmark WTI continued its two-day rise and moved towards $100 amid expectations that the Iran war may not end soon.<\/p>\n
WTI fell to $88.93 during Thursday\u2019s US session after reports that Iran allowed 10 oil tankers to pass. Prices later rebounded during Friday\u2019s Asian session as fighting continued.<\/p>\n
US President Trump extended the deadline to attack Iran\u2019s energy sites into April. Reports on negotiations remained mixed, with the US saying talks are going \u201cvery well\u201d and Iranian leaders saying they await a US response to ceasefire conditions.<\/p>\n
Israel reported intercepting missiles from Iran overnight. Israel also carried out air strikes on targets in Beirut and Tehran.<\/p>\n
The Wall Street Journal reported that the Pentagon is considering sending 10,000 additional troops to the Middle East. A longer conflict and continued disruption risks could keep Oil prices near $100 or higher for most of 2026, alongside concerns about the Strait of Hormuz remaining closed.<\/p>\n
The fading hope for a swift end to the Iran war suggests we should maintain a bullish bias on crude oil. We see traders positioning for a move towards, and beyond, the psychological $100 level by buying call options for May and June 2026 contracts. This view is strengthened by the latest Energy Information Administration report, which showed a larger-than-expected crude inventory draw of 4.2 million barrels, signaling tight underlying supply.<\/p>\n
The constant contradictory headlines are creating significant price swings, which is pushing implied volatility on oil options to its highest levels since the initial conflict began in late 2025. This environment makes buying simple call or put options very expensive. Therefore, we believe using debit or credit spreads is a more prudent way to express a directional view while managing the high costs associated with this volatility.<\/p>\n
We remember how prices surged in 2022 following the invasion of Ukraine, with WTI briefly touching over $130 per barrel on fears of supply disruption. The current military escalation and the potential for a full ground invasion mirror the conditions that created that historic price spike. The market is pricing in a similar “war premium,” which is likely to expand significantly if the additional 10,000 U.S. troops are confirmed for deployment.<\/p>\n
The most critical factor remains the Strait of Hormuz, through which about a fifth of the world’s oil passes. Recent maritime intelligence data shows that tanker insurance premiums for the region have tripled in the last month, and traffic is down nearly 40% from pre-conflict levels. Any direct confrontation in this chokepoint would immediately threaten the physical supply of millions of barrels and could send prices well north of $120 almost instantly.<\/p>\n
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