Iran\u2019s Islamic Revolutionary Guard Corps said on Wednesday that Iran will manage the Strait of Hormuz proactively and control it intelligently. It also warned of a stronger response to any renewed attacks by the United States or Israel, according to Reuters.<\/p>\n
The IRGC said it will continue to support resistance groups in Lebanon, Palestine, Yemen and Iraq. The statement did not provide further details on timing or actions.<\/p>\n
In market moves, the report was not linked to a clear change in sentiment. At the time of publication, the US Dollar Index was down nearly 1% on the day at 98.55.<\/p>\n
We recall similar statements from last year regarding Iran’s management of the Strait of Hormuz, which markets initially dismissed. With roughly 21 million barrels of oil passing through the strait daily, representing over 20% of global consumption, any disruption risk cannot be ignored. This vulnerability remains a core factor for energy markets.<\/p>\n
Currently, Brent crude is hovering around $86 per barrel, and the CBOE Crude Oil Volatility Index (OVX) has been trending near a six-month low of 32. This suggests a degree of complacency is priced into the market, underestimating the potential for a sudden supply shock. We saw a similar calm before the 2019 tanker incidents, which caused a rapid 15% price spike in a single day.<\/p>\n
Given the low implied volatility, purchasing call options on WTI or Brent futures expiring in the next two to three months is a logical strategy. This allows for a defined, limited risk on the premium paid, while offering significant upside if geopolitical tensions flare up. Out-of-the-money calls, in particular, provide a cost-effective way to position for such an event.<\/p>\n
Beyond oil itself, we see an opportunity in broader market volatility hedges. The VIX index is currently trading at a relatively subdued level of 14, well below levels seen during past geopolitical crises. Buying VIX call options could serve as an effective portfolio hedge against a widespread flight to safety.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" IRGC says Iran will proactively manage Strait of Hormuz, backing regional groups and warning stronger retaliation.<\/p>\n","protected":false},"author":103,"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-47078","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-ca\/wp-json\/wp\/v2\/posts\/47078","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/103"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=47078"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/47078\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=47078"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=47078"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=47078"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}