WTI began Monday with a price gap of over 5% and then rose by more than 8%, moving above $72. The move followed new conflict between the US and Iran, with support from Israel.<\/p>\n
The US and Israel carried out strikes on Iran on Saturday. After the attacks, Iran\u2019s Islamic Revolutionary Guard Corps Navy announced a halt to shipments through the Strait of Hormuz.<\/p>\n
More than 20% of global oil passes through the Strait of Hormuz. Reuters reported that many tanker owners, oil companies and trading firms paused shipments of crude, fuel and liquefied natural gas through the waterway.<\/p>\n
US President Donald Trump said military operations in Iran would continue until US aims are met. Further price moves depend on new updates on the conflict.<\/p>\n
Markets also reacted to OPEC+ agreeing an output increase of 206,000 barrels per day for April. The rise was above analysts\u2019 expectations.<\/p>\n
We remember the sharp spike in WTI prices back in 2025 when the conflict choked off the Strait of Hormuz, an event that taught us how quickly geopolitical shocks can reprice the entire market. That rapid move past $72 a barrel serves as a critical lesson for our strategy today, especially as WTI currently trades near $85. The market’s memory of that volatility is now a key factor in how we should position ourselves.<\/p>\n
With fresh whispers of instability in the region, we are seeing the CBOE Crude Oil Volatility Index (OVX) holding at an elevated 38, indicating traders are pricing in a significant risk of another supply disruption. This means option premiums are expensive, reflecting the market\u2019s fear of a repeat of the 2025 logistical paralysis. Simply buying long calls could therefore be a very costly strategy for gaining upside exposure.<\/p>\n
Given the high cost of options, we should consider vertical call spreads to position for a potential price surge. By buying a lower-strike call and selling a higher-strike call, we significantly reduce our entry cost while still profiting from a rise in oil prices. This strategy is a measured way to stay bullish without overpaying for volatility.<\/p>\n
We also recall the profit-booking that followed the initial 2025 spike, which reminds us that these events can see sharp, if brief, reversals. To hedge against a sudden de-escalation or a coordinated release from the Strategic Petroleum Reserve, purchasing puts or implementing put spreads remains a prudent move. This provides a necessary insurance policy should the present geopolitical situation calm down unexpectedly.<\/p>\n
Underpinning all of this, we must note that the physical market is tighter now than it was in 2025. The most recent Energy Information Administration (EIA) data shows U.S. crude inventories have fallen by nearly 9 million barrels over the last month, leaving less of a buffer. This underlying tightness suggests any new supply shock could have an even more pronounced impact on prices.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" WTI surged above $72 after US-Israel strikes on Iran and Hormuz threats, while OPEC+ boosted output.<\/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-50469","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\/50469","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=50469"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/50469\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=50469"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=50469"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=50469"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}