US President Donald Trump said Iran’s ability to launch missiles and drones has been curtailed. He said Iran’s navy is gone, its air force is in ruins, and most of its leaders are dead. Trump said the US does not need oil from the Middle East and does not need the Hormuz Strait. He said short-term gas price increases were due to Iran’s attacks, including tanker attacks, and said the US has plenty of gas.

Military Claims And Strategic Objectives

He said the US will never let Iran have nuclear weapons and that Iran cannot be trusted with them. He said core US strategic objectives are close to completion and that the US is on track to complete its military objectives shortly. Trump said the US would “finish the job” very fast and would “hit them extremely hard” over the next two to three weeks, while discussions continue. He also said US oil production will soon be substantially higher, and that the US could strike Iran’s oil. Following the comments, WTI crude was up 0.75% at $94.85. WTI is a US light, sweet crude benchmark, with prices driven by supply and demand, geopolitics, OPEC decisions, the US dollar, and inventory data from API and EIA, which are within 1% of each other 75% of the time. The initial market reaction pushed WTI crude to $94.85, and as of today, April 2, 2026, prices are holding firm near $98 a barrel. This shows the market is weighing the threat of hitting Iran “extremely hard” more heavily than the claim that the conflict is nearly finished. The key takeaway is the potential for extreme price swings based on conflicting news.

Volatility Strategies For WTI

This environment of high uncertainty is ideal for volatility-based derivative plays. We believe traders should consider buying options straddles or strangles on WTI futures expiring in the next 30 to 60 days. This strategy profits from a large price move in either direction, whether from a sudden escalation or a confirmed end to hostilities. Despite the assurance that we have plenty of gas, recent government data suggests otherwise. The Energy Information Administration’s report last week showed a surprise crude oil inventory draw of 3.2 million barrels, indicating that domestic supply is tighter than stated. This makes the global market more sensitive to any real or perceived disruption from the Middle East. We are also discounting the idea that the Strait of Hormuz is not needed. About a fifth of the world’s daily oil consumption passes through that channel, a fact that has not changed since the conflict began in 2025. Reflecting this risk, insurance premiums for oil tankers transiting the region have skyrocketed, adding a persistent risk premium to global oil prices. If the core objectives are truly completed soon, oil prices could fall sharply. A de-escalation would see shipping lanes reopen and risk premiums evaporate, which would be bearish for crude. We saw a similar pattern after the 2019 attacks on Saudi oil facilities, where prices spiked on the initial news but fell back quickly once production was restored. Create your live VT Markets account and start trading now.

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