WTI rose for a third day, reaching about $95.80–$95.85 in Asia, a one-and-a-half-week high. It later slipped but stayed just above $92.00, up nearly 0.30% on the day.
A temporary extension of the US-Iran ceasefire did not remove concerns about continued conflict. Tension around the Strait of Hormuz kept worries about disruption to the shipping route.
US President Donald Trump said on Tuesday that the US Navy blockade of Iranian ports will continue. Iran’s semi-official Tasnim news agency reported that Iran’s Revolutionary Guards Navy seized two vessels, and that at least three container ships were hit by gunfire in the Strait on Wednesday.
Prices also found support after a surprise draw in US crude stockpiles. An intraday jump was linked to false reports of an attack on Tehran, and the move later eased.
With WTI crude holding strong around $88, we see a familiar pattern emerging. Tensions are again high in the Red Sea, while the latest EIA report showed a surprise inventory draw of 3.1 million barrels last week. This tight supply backdrop mirrors situations we’ve navigated before.
We are reminded of the Strait of Hormuz tensions back in 2025, when similar disruptions pushed prices firmly above the $92 mark. The market is once again pricing in a significant geopolitical risk premium, suggesting the path of least resistance is upwards. The fundamental picture, supported by OPEC+ maintaining production cuts through the second quarter, supports a bullish stance for oil.
For those looking to capitalize on this, buying out-of-the-money call options for June 2026 delivery appears prudent. A move towards the $95 strike price offers considerable upside if these supply fears continue to mount. This strategy allows for participation in a rally while strictly defining the risk to the premium paid.
However, we also remember how quickly prices retreated on rumors during the 2025 spike, creating significant volatility. With implied volatility currently elevated, selling cash-secured puts below the current market, perhaps at the $82 or $80 level, could be a way to collect rich premiums. This benefits traders if prices move up, sideways, or even fall slightly.
