Brent crude climbed to a multi-week high above $97 per barrel in early Thursday trading, as the market repriced geopolitical risk linked to rising US-Iran tensions. Dealers have been factoring in scenarios ranging from a temporary closure of the Strait of Hormuz to a wider Persian Gulf conflict that could disrupt regional oil and gas infrastructure, pushing risk premia into futures and physical markets.<\/p>\n
Shipping through the Strait of Hormuz has almost stopped as rhetoric and military exchanges intensify. Separately, Iran-backed Houthi forces in the Red Sea have increased attempts to disrupt maritime traffic, adding to concerns about global energy supply. Attention is turning to diplomatic efforts to de-escalate, which could relieve upward pressure on crude, although an extended period of hostilities would leave room for further price gains.<\/p>\n
With Brent crude surging past $97 a barrel today on July 23, 2026, we advise derivative traders to brace for extreme short-term volatility. Since the Strait of Hormuz handles over 20 million barrels of oil per day\u2014nearly 20% of global petroleum consumption\u2014any prolonged shipping halt will trigger violent price swings. We recommend utilizing options strategies like bull call spreads to limit premium costs while still capturing the immediate upside potential.<\/p>\n
Historically, during major geopolitical flare-ups in the Middle East, implied volatility for Brent options has spiked by more than 40% in just a few days. Because options are becoming incredibly expensive to buy outright, we suggest using spreads to mitigate the high volatility crush. For high-risk traders, selling out-of-the-money puts can help finance long call positions as the market prices in a sustained conflict.<\/p>\n
For those holding long futures positions, securing protective puts is now a priority to hedge against a sudden diplomatic breakthrough that could quickly dump prices back toward $80. Weekly options will offer the best flexibility over the coming weeks as we monitor shipping bottlenecks in both the Red Sea and the Persian Gulf. We must closely watch daily trading volumes, which have already surged by over 15% this week, signaling that major institutional players are aggressively repositioning.<\/p>\n\n\n\n