Market Reaction And Current Pricing
West Texas Intermediate (WTI) was down 1.05% on the day at $93.85 at the time of writing. We saw how Australia’s decision back in late 2025 to release fuel reserves initially pushed West Texas Intermediate prices down. This was a classic short-term reaction to a supply-side announcement, as the market priced in the immediate availability of more fuel. That dip to around $93 proved to be temporary as the underlying supply chain risks from the Iran conflict remained. Looking at the market today, March 13, 2026, WTI is trading closer to $88 per barrel after a volatile start to the year. Recent data from the U.S. Energy Information Administration now points to a potential global supply surplus of nearly 500,000 barrels per day for the second quarter. This forecast is creating downward pressure and suggests the initial supply panic from last year has been absorbed. The key for us in the coming weeks is the elevated implied volatility in the options market. The CBOE Crude Oil Volatility Index (OVX) is hovering around 37, which is significantly higher than the levels below 30 we saw before the conflict escalated in 2025. This environment suggests selling options premium through strategies like iron condors or strangles could be profitable, assuming no major escalation. We should also remember the lessons from the massive strategic reserve releases that occurred back in 2022. Historically, these government actions provide a temporary ceiling on prices but do not fix the fundamental geopolitical problems driving the risk. Therefore, any sharp price drops in the coming weeks on further supply news could be viewed as buying opportunities for longer-dated futures contracts.Geopolitical Risks And Shipping Constraints
Our primary focus must now shift back to the geopolitical situation and tanker traffic through the Strait of Hormuz. Shipping data from early March 2026 shows insurance premiums for vessels in the region are still 15% higher than they were a year ago. Any actual disruption to passage there would immediately override inventory data and send prices sharply higher. Create your live VT Markets account and start trading now.
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