WTI slipped to about $89.60 per barrel in Asian trading on Friday, holding losses near $89.50. Prices eased as supply fears softened ahead of expected US–Iran talks this weekend.
Donald Trump said Tehran agreed to abandon nuclear ambitions, offer “free oil”, and reopen the Strait of Hormuz, while Iran has not confirmed this. He also said a permanent ceasefire could be reached before it expires next week.
Trump said he spoke with Lebanese President Joseph Aoun and Israeli Prime Minister Benjamin Netanyahu. He said Israel and Lebanon agreed to a 10-day ceasefire starting at 5 PM ET.
CNN reported that Lebanon accused Israel of “several acts of aggression” and said shelling hit villages in southern Lebanon. Lebanon’s army urged residents to delay returning to southern towns and villages due to reported breaches.
The Strait of Hormuz is described as effectively closed by a dual US–Iran blockade, raising concern over global energy flows. ING estimates about 13 million barrels per day of oil supply has been disrupted by the closure.
We should remember the extreme price swings from the 2025 crisis when WTI hovered near $89.50 amid the Strait of Hormuz closure. Today, with the strait open, the price is more stable around $85, but that episode shows how quickly geopolitical headlines can overwhelm fundamentals. The key difference now is that the estimated 13 million barrels per day of disrupted supply from that period is back online, creating a much different market structure.
Recent data shows US crude inventories building, with the latest EIA report for the week ending April 10, 2026, showing a surplus of 2.9 million barrels. This suggests that demand may be softening slightly, which is putting some downward pressure on front-month contracts. This is a sharp contrast to late 2025, when any news of potential supply returning from Iran caused immediate price drops from crisis-level highs.
However, we see OPEC+ providing a solid floor under the market by maintaining their voluntary production cuts of 2.2 million barrels per day. This supply management is preventing prices from falling significantly despite the inventory builds we are currently witnessing. The cartel’s discipline suggests they will act to prevent a return to the price collapses seen in previous years.
Given this dynamic of bearish inventory data fighting bullish OPEC+ policy, implied volatility in options has decreased from the highs of 2025 but remains elevated. This presents an opportunity for selling premium through strategies like covered calls on long positions or iron condors if we expect prices to remain range-bound. We should look to sell volatility while defining our risk, as the memory of last year’s Mideast flare-up is still fresh.
The forward curve is less backwardated than it was during the 2025 supply shock, indicating the market is not as worried about immediate shortages. This makes calendar spread trades less compelling than they were six months ago. Traders should focus on the current range between fundamental support from OPEC and resistance from weakening demand signals.
