TD Securities’ commodity team says ongoing disruption in the Persian Gulf and blocked flows through the Strait of Hormuz are keeping oil markets tight. It states that crude oil, petroleum products and LNG could face tighter supply-demand conditions while flows remain frozen.
The team forecasts oil prices could rise by $50 or more if the war continues for weeks. It also projects that, even if hostilities end soon, deficits and low inventories could keep energy prices elevated well into 2027.
TD Securities expects $90–100 crude to persist for the foreseeable future. It adds that inventory rebuilding demand from countries such as China and Japan could add to pressure on supplies.
The article notes it was produced with assistance from an artificial intelligence tool and reviewed by an editor.
Given the prolonged disruption in the Persian Gulf, we believe oil is positioned for another sharp move up. The continued blockage of the Strait of Hormuz keeps the market exceptionally tight, making bullish strategies attractive. Traders should consider buying call options to capitalize on a potential surge of $50 or more in the coming weeks.
This outlook is supported by the latest Energy Information Administration (EIA) data, which showed a larger-than-expected inventory draw of 4.2 million barrels last week. With Brent crude already trading over $120 per barrel, the physical market is confirming a severe supply crunch. These conditions suggest the current surge in energy prices has not yet run its course.
Market uncertainty has pushed the CBOE Crude Oil Volatility Index (OVX) to its highest levels since the conflict began in late 2025. This elevated volatility makes buying options expensive. Therefore, using call debit spreads could be a more cost-effective way to gain upside exposure while limiting premium decay.
Even if the conflict ends, we expect prices to remain high well into 2027, establishing a new floor around $90–100 per barrel. Drained strategic reserves, particularly in China and Japan, will create sustained demand as nations rush to replenish their stocks. Selling far-dated puts with strike prices around $85 could be a way to collect premium based on this high price floor.
The impact also extends to LNG, with the lack of Qatari cargoes causing European natural gas prices to climb above €160 per megawatt-hour. This is creating a similar supply-driven rally that we have seen in crude oil. Consequently, bullish positions in natural gas futures or options could offer a related trading opportunity.
