US strikes on Iran continued for a second straight day, with US Central Command citing \u201cIran\u2019s unwarranted and continued aggression\u201d and Defence Secretary Pete Hegseth saying \u201ckey facilities\u201d were being hit, while Iranian media reported impacts near Minab and Sirik close to the Strait of Hormuz. A Qatari delegation had flown into Tehran to \u201cbridge the remaining gaps\u201d and was still there when the latest strikes began, tightening the timing around any potential mediation channel. Iran\u2019s president, Masoud Pezeshkian, described threats against the country\u2019s power, water and transport networks as \u201ca sign of weakness\u201d.<\/p>\n
Tehran\u2019s response was issued via the Islamic Revolutionary Guard Corps (IRGC) Telegram channel, declaring the Strait \u201cclosed to all vessels, including oil tankers and commercial ships\u201d, effective immediately, and warning that any vessel attempting transit would be targeted. JPMorgan estimated visible traffic at roughly 15% of pre-war levels, even as US claims pointed to escorted passages totalling more than 200 commercial ships and to improving flows. Iran\u2019s navy separately told vessels not to move from anchorage in the Persian Gulf and the Sea of Oman, said Hormuz would be closed until further notice, and Iranian state media cited a senior official denying any contact between Iranian officials and Donald Trump.<\/p>\n
The threat to close the Strait of Hormuz puts a significant portion of global oil supply at immediate risk. We see this as a clear signal to increase long exposure to crude oil prices through the rest of June and July. We are buying out-of-the-money call options on Brent crude futures, as conflicting reports suggest this situation will worsen before it improves.<\/p>\n
Approximately 21 million barrels of oil, almost a fifth of the world’s daily supply, move through this chokepoint. Historically, similar disruptions, such as the 1990 Gulf War, caused oil prices to more than double in two months. We believe Brent futures, which have already surged 8% this week to over $115 per barrel, are not yet pricing in a complete or prolonged shutdown.<\/p>\n
This level of uncertainty is pure fuel for market volatility. The VIX index has already jumped from a low of 14 last month to over 25, and we anticipate it will test the 30-35 range as official statements continue to contradict each other. We are therefore buying call options on VIX futures as a direct hedge against rising market fear.<\/p>\n
Higher energy costs act as a tax on the global economy, so we are positioning for a downturn in broader equity markets. We are adding to our put positions on the S&P 500 and are specifically targeting transport and airline stocks. These sectors have little ability to absorb a sustained fuel price shock of this magnitude.<\/p>\n
Conversely, we see clear upside in sectors that benefit from this geopolitical tension. We are increasing our long call positions on major defense contractors and large-cap energy producers. These firms stand to gain from increased military spending and the reality of sustained higher oil prices.<\/p>\n
The direct threat to commercial vessels makes a play on shipping stocks attractive. Any company with significant tanker exposure in the Persian Gulf is now facing uninsurable risks and operational chaos. We are buying puts on major tanker operators for the coming weeks.<\/p>\n","protected":false},"excerpt":{"rendered":"
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