Iranian state television cited General Mohsen Rezaei, an adviser to Iran’s Supreme Leader, as saying Tehran would not permit the opening of a second corridor in the Strait of Hormuz, according to Reuters. He said Iran would target any warships or military forces brought to the waterway for that purpose. Rezaei also said Iran continued attacks for two days after the US stopped its attacks, and added that a Saudi official told Iran’s Ministry of Foreign Affairs that Riyadh was not involved in an attack on Iraq. He further stated Iran had been prepared to strike three points in Ukraine, but cancelled the action after an apology.
In markets, West Texas Intermediate was down 0.03% at $80.50. The broader context included standard “risk-on” and “risk-off” framing: risk-on is associated with rising stocks, most commodities excluding Gold, stronger commodity-exporter currencies and higher Cryptocurrencies. Risk-off is linked to higher Bonds, stronger Gold and moves into safe-haven currencies such as the US Dollar, Japanese Yen and Swiss Franc, while risk-on can favour the Australian Dollar, Canadian Dollar and New Zealand Dollar, alongside minor FX such as the Ruble and South African Rand.
Strait Of Hormuz Risks And Global Energy Market Volatility
We must watch the Strait of Hormuz closely in the coming weeks, as this narrow waterway carries roughly 20% of the world’s daily petroleum liquid consumption. With Iran threatening to target military forces trying to establish a second corridor, the risk of a sudden supply disruption is exceptionally high. Derivative traders should prepare for sudden, violent price swings in global energy markets.
We recommend utilizing long call options or bullish vertical spreads on West Texas Intermediate (WTI) and Brent crude to capture upside volatility without risking unlimited capital. Given that WTI is currently hovering near $80.50, buying out-of-the-money call options expiring in September 2026 offers a highly leveraged way to profit from any geopolitical escalation. Additionally, implied volatility in the oil markets is likely to surge, making long straddles highly appealing for traders who expect a massive move but are unsure of the direction.
Safe-Haven Strategies And Portfolio Protection
We also expect a sharp shift toward safe-haven assets if military tensions boil over in the Gulf. Traders should look to buy call options on Gold and establish long derivative positions in safe-haven currencies like the US Dollar and Swiss Franc. Historical data shows that during previous Middle East flashpoints, these assets consistently outperformed commodity-linked currencies like the Australian and Canadian dollars.
We must also protect our broader portfolios by hedging equity exposure against a sudden market downturn. Purchasing put options on major indices like the S&P 500 will help offset losses if a “risk-off” sentiment sweeps the global financial markets. Focusing on short-term weekly puts will give us the flexibility to adapt as this military standoff unfolds.
