WTI crude rose on Thursday for a fourth day, amid concerns over oil supply flows through the Strait of Hormuz. It traded near $94.56 a barrel after an intraday high close to $97, up 2.8% on the day.
Reports said Mohammad Bagher Ghalibaf, Iran’s Parliament Speaker and lead negotiator, resigned from the negotiating team after alleged interference by the Islamic Revolutionary Guard Corps, according to Israel’s N12 News. The report described divisions within Iran’s leadership and less prospect of near-term progress in US-Iran talks.
The Strait of Hormuz was described as under a dual blockade by US forces and Iran. US President Donald Trump said on Truth Social that the US has “total control” of the strait and that “no ship can enter or leave” without US Navy approval.
Trump also said he ordered the Navy to “shoot and kill any boat” placing mines in the waterway, and that the route is “sealed up tight” until Iran agrees to a deal. Iranian officials said the US must lift the naval blockade, which Tehran calls a ceasefire breach.
The Washington Post cited a Pentagon assessment saying it could take up to six months to fully clear mines from the strait. Tasnim and shipping companies reported the IRGC seized two vessels on Wednesday.
We recall the intense market conditions in 2025 when escalating tensions in the Strait of Hormuz pushed WTI crude prices toward $97 per barrel. The dual blockade and the breakdown in US-Iran negotiations created a significant supply disruption risk that kept the market on edge for months. That period of extreme uncertainty has set the stage for our current trading environment.
As of today, April 24, 2026, WTI is trading at a more subdued $88.50, but the geopolitical risk premium from last year’s crisis has not fully disappeared. Lingering distrust and occasional naval posturing in the region continue to influence prices. This sustained tension creates an environment where sharp price movements can be triggered by seemingly minor headlines.
For derivatives traders, this means implied volatility in crude options remains elevated compared to historical norms before the 2025 crisis. The CBOE Crude Oil ETF Volatility Index (OVX), which spiked to nearly 60 during the blockade, now hovers around 35, well above the 25-30 range we saw in calmer periods. This suggests the market is still pricing in a significant chance of future supply disruptions.
Given this backdrop, we should consider strategies that benefit from potential price spikes while managing the high cost of options. Buying long-dated call spreads on WTI is an attractive approach. This allows us to capture upside from any renewed conflict in the Gulf but caps our initial cost in this high-volatility setting.
The supply situation also supports this cautious but bullish bias. Following last year’s disruption, OPEC+ increased production, and recent data from the EIA shows their collective spare capacity is now down to just 2.5 million barrels per day, a multi-year low. This leaves the global market with a much thinner buffer to absorb any new shocks.
Furthermore, while the Strait of Hormuz is open, shipping insurance premiums for tankers transiting the waterway remain about 40% higher than they were prior to the 2025 events. This added cost is a constant reminder of the underlying risk that still affects the physical transport of nearly a fifth of the world’s oil supply. We should watch for any new rhetoric or minor naval incidents, as they could cause a rapid repricing of this risk.
