Iran fired on three ships in the Strait of Hormuz, and escorted two of them into Iranian waters, the Wall Street Journal reported on Wednesday. The incidents came a day after US President Donald Trump extended a ceasefire while maintaining an American blockade of Iranian ports.<\/p>\n
Iranian media said the Islamic Revolutionary Guard Corps was taking the two ships to Iran. White House press secretary Karoline Leavitt said the seizures did not breach the ceasefire terms.<\/p>\n
West Texas Intermediate crude was up 0.35% on the day at $92.25 at the time of writing.<\/p>\n
We remember well the tensions from last year when Iran seized those ships in the Strait of Hormuz. That event in 2025 pushed WTI crude to over $92, creating significant market jitters that are still fresh in our minds. Today, the market’s memory of that volatility is shaping current trading strategies.<\/p>\n
Currently, oil transit through the strait has stabilized, with recent data from the Energy Information Administration showing flows at nearly 21 million barrels per day, close to pre-crisis levels. However, diplomatic channels remain fragile, and any perceived breakdown could instantly reintroduce a risk premium into the market. This creates a deceptive calm for those watching energy prices, which are holding steady around $85 per barrel today.<\/p>\n
Given this backdrop, we see implied volatility in oil options as unusually low, with the CBOE Crude Oil Volatility Index (OVX) hovering near 32, a sharp contrast to the peaks above 50 seen in 2025. This suggests that buying options, such as long straddles on WTI futures, could be a cost-effective way to position for a potential shock in the coming weeks. We learned from the supply disruptions of the past that the market can reprice geopolitical risk almost overnight.<\/p>\n
Another approach is to focus on the spread between Brent and WTI crude, which is currently tight at just over $3.50 per barrel. Historically, any flare-up in the Strait of Hormuz disproportionately affects Brent, causing this spread to widen significantly, as it did in 2019 when it blew out past $7.00. We believe establishing long positions in the Brent-WTI spread offers a targeted way to trade on renewed Middle East tension.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Iran fired on three ships in Hormuz, escorting two into Iran; US says ceasefire unbroken.<\/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-48431","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