Insights 
VT 
Iraq confirms that gas supplies from Iran continue uninterrupted despite recent Israeli strikes in the region. This assurance comes amidst escalating tensions.
Following a temporary drop, oil prices are climbing once more. West Texas Intermediate (WTI) crude is trading at $72.96, reflecting a 6% increase for the day.
Gas Supply Stability
Iraq has clarified that its gas flows from Iran are steady, even as Israeli military actions stir concern across the region. This statement from Baghdad appears intended to allay fears over potential disruptions to energy infrastructure that could jolt broader markets. Gas-fuelled power generation remains a key component of Iraq’s electricity grid, and any adverse impact on these imports would likely trigger wider power shortages.
Meanwhile, West Texas Intermediate (WTI) crude saw a sharp upward move and is now trading at $72.96 per barrel, bouncing back by 6% on the day. The rise follows a brief pullback, potentially driven by uncertainty about security risks in the Middle East and fluctuations in near-term demand expectations. Brent crude is also recovering, lending more weight to the view that the early-week dip may have over-corrected.
From our side, the steady energy consumption figures in Asia and continued refinery demand in the United States suggest that appetite for crude hasn’t eased. What we’re seeing here isn’t just a reflexive price spike reacting to headlines, but the result of collective reassessment among energy participants of how durable the current supply pathways truly are. If Iraqi gas imports from Iran are safe for now, it still doesn’t remove the broader concerns linked to the fragility of interconnected supplies.
Market Reactions and Positions
Given the quick climb in energy futures, we took note that options pricing has widened, reflecting increased premium costs for protection on both upside and downside. Volatility measures, particularly for the front-month contracts, are pointing to elevated risk pricing that may persist through the next two weekly settlement windows. The response from institutional participants appears increasingly tactical, with many rolling their positions earlier than usual.
Once the initial jitters from the eastern Mediterranean started making headlines, we saw a sizeable uptick in call volume across the $75 and $80 strikes in short-dated WTI contracts, suggesting preparedness for more abrupt moves. The positioning, driven by hedgers and short-term buyers alike, underlines how sensitive this month has become to unexpected geopolitical nudges.
Hosseini’s recent comments on exporting consistency have kept bearish trades more tentative. He spoke firmly about no expected drop in deliveries, bolstering some confidence among industrial end-users. However, it’s telling that backwardation hasn’t flattened substantially, indicating that medium-term tension still holds sway over calm assurances in the press.
In this environment, sharp reactions are now the norm rather than the exception. Any further headlines from Tehran or Tel Aviv may not only rattle spot but could very quickly spill over to the derivatives curve, particularly the second and third WTI contract months which are now trading with above-average gamma exposure. Timing, therefore, becomes just as important as direction.
As we continue to track open interest concentration by strike, we’ve been flagging that the distribution is now disproportionately crowded at the top of recent ranges. Traders have been lifting delta in phases—not as a unified response—but more along piecemeal risk reduction. That clustering could become a pressure point in the coming 10 to 12 sessions, especially if macro data diverges from current energy market sentiment.
Given that broader volatility indices aren’t yet peaking across other asset classes, any widening here in crude derivatives may lead to spillovers only within commodity-linked venues for now. Still, it’s clear that no positions, even those deemed hedged last week, are perfectly insulated in such an environment where political statements and regional reprisals are able to affect intraday volume surges.
The next test appears likely to come from updated U.S. inventory data and Iranian export signals, both of which tend to creep into prices even before numbers are officially confirmed. We’ll be adjusting positioning not just in response, but proactively—especially around expiry windows where liquidity pockets have become thinner.
As always, when energy pricing becomes married to headlines, the balance of staying nimble and managing exposure no longer feels optional—but necessary.
