The IEA said it is considering a further release of emergency oil reserves, though no decision has been made yet. It said markets may remain volatile for some time.
The IEA said energy prices could rise if the Strait of Hormuz is not reopened. It also estimated it could take about two years for global oil production to return to pre-war levels.
Electric Vehicle Adoption Accelerates
The IEA said the shift towards electric vehicle use is expected to accelerate faster than earlier forecasts.
WTI crude was down 0.39% at $89.35 at the time of writing.
Given the high probability of significant price increases if the Strait of Hormuz remains closed, we believe traders should consider buying call options on crude oil futures like WTI and Brent. The market seems to be under-pricing this risk, as evidenced by the slight dip to $89.35, creating a potential entry point for long positions. We saw a similar situation during the early days of the Gulf of Aden conflict in late 2025, where prices lagged behind geopolitical risk before surging.
The possibility of an emergency oil reserve release introduces a counter-risk, which would temporarily depress prices. Therefore, a prudent strategy would be to use option spreads to cap potential losses or to be prepared to take profits on any sharp price run-up before an official announcement is made. A coordinated release in the third quarter of 2025 caused a brief 7% drop in prices, showing how quickly sentiment can turn on this news.
Positioning For Volatility
However, we see any such dip as a buying opportunity, since the underlying supply issue will persist for a long time. The two-year timeline to restore production to pre-war levels, combined with global spare capacity already reported to be under 2.5 million barrels per day, suggests a sustained period of elevated prices. This structural deficit will likely outweigh the short-term impact of any reserve releases.
Longer-term, the accelerated shift to electric vehicles (EVs) is a key takeaway from this crisis. While this points to lower oil demand years from now, it creates an immediate opportunity in other commodities. We are seeing increased interest in call options on copper and lithium futures, as global EV sales already surpassed 14 million units in 2025 and are now projected to grow even faster.
