WTI US oil fell on Friday to about $81.50, after dropping 9.12% on the day. It had briefly risen above $90, then slid to an intraday low of $80.30, its weakest level since 10 March.<\/p>\n
The move followed news from the Middle East. Iran\u2019s Foreign Minister, Abbas Araghchi, said that after the ceasefire in Lebanon the Strait of Hormuz has been declared fully open to all commercial vessels for the rest of the truce period.<\/p>\n
Araghchi said shipping would resume using coordinated routes set by Iran\u2019s Ports and Maritime Organisation. US President Donald Trump said the strait is open for passage, while a naval blockade would still apply to Iran until a US-Iran transaction is completed.<\/p>\n
The change reduced fears that the strait would stay closed after rising US-Iran tensions. The Strait of Hormuz is a major route for global oil shipments.<\/p>\n
ING had estimated that about 13 million barrels per day of oil supply was disrupted by the blockade around the strait. With reopening now announced, trading shifted towards the ceasefire\u2019s duration and whether the US and Iran can agree terms to keep the route open.<\/p>\n
The dramatic unwinding of the geopolitical risk premium means that implied volatility in crude oil options is set to collapse in the coming days. The CBOE Crude Oil Volatility Index (OVX), which had been trading near multi-year highs around 55, will likely fall sharply toward its year-to-date average. For us, this makes selling volatility through strategies like short strangles or iron condors an attractive proposition, capitalizing on the market’s shift away from extreme event risk.<\/p>\n
With the immediate threat of a wider conflict removed, our focus must now shift back to market fundamentals, which were already tight. Remember that OPEC+ agreed back in December 2025 to hold production cuts through the second quarter, and recent demand figures from China for Q1 2026 came in stronger than anticipated. This suggests that while the fear-driven peak is gone, a solid floor for prices may establish itself in the high $70s.<\/p>\n
This new environment favors selling downside protection that was recently very expensive. We should look to sell out-of-the-money put options below the $80 strike price, collecting what is left of the elevated premium as the market digests the news. The extreme demand for upside call options seen over the past few weeks has evaporated, and those positions will now see their value decay rapidly.<\/p>\n
We have seen this pattern before, such as after the drone attacks on Saudi Arabian facilities back in 2019. In that instance, a massive price spike was almost fully retraced within two weeks as supply fears were proven to be overblown. Today\u2019s 9% drop is a similar reaction, suggesting the market will now seek equilibrium based on actual supply flows rather than potential disruptions.<\/p>\n
Moving forward, the key data will be the weekly Energy Information Administration (EIA) inventory reports and real-time shipping data. After last Wednesday\u2019s report on April 15, 2026, showed a surprise crude draw of 2.1 million barrels, we will now watch to see how quickly the resumption of traffic through Hormuz translates into inventory builds. Satellite tracking data from firms like Vortexa will be critical in confirming that the nearly 17 million barrels per day of average flow seen in late 2025 has truly resumed.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" WTI crude plunged to $81.50 after Iran declared Strait of Hormuz open, easing blockade disruption fears.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-45269","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45269","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=45269"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45269\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=45269"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=45269"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=45269"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}