WTI rose for a second day, trading near $95.20 per barrel during Asian hours on Tuesday. Prices were supported as the Strait of Hormuz remained largely shut, tightening Middle East supply.<\/p>\n
Markets also assessed ceasefire prospects and whether the route could reopen after a new Iranian proposal to the US. Iran reportedly said via Pakistan that hostilities could end if the US lifts its naval blockade, changes Hormuz transit rules, and offers guarantees against future military action.<\/p>\n
A US official said on Monday that President Donald Trump was dissatisfied with the proposal. Iranian sources said Tehran would not address its nuclear programme until fighting stops and Gulf shipping disputes are resolved.<\/p>\n
The conflict is in its ninth week, lifting energy prices and disrupting supply chains. The International Energy Agency warned of a potential supply shock alongside slowing demand risks.<\/p>\n
Iran restricted flows through Hormuz, which handles about 20% of global oil and gas, while the US kept a blockade of Iranian ports. Reuters ship-tracking data showed six Iranian tankers turned back, while an ADNOC LNG tanker crossed Hormuz and was nearing India.<\/p>\n
With West Texas Intermediate holding near $95.50, we see the market is priced for this conflict but is extremely sensitive to daily headlines. The nine-week shutdown of the Strait of Hormuz creates a high-stakes environment where any news about the US naval blockade or Iranian proposals can cause sharp price swings. Traders must be prepared for this heightened volatility to continue in the coming weeks.<\/p>\n
The situation presents a clear binary choice based on the outcome of ceasefire negotiations. A successful deal that reopens the strait would likely send prices tumbling back towards the low $80s, while a definitive collapse in talks could push crude oil well past the $100 mark. We are essentially trading geopolitical speculation, not just supply and demand fundamentals.<\/p>\n
This uncertainty is reflected in the derivatives market, where the CBOE Crude Oil Volatility Index (OVX) has surged to over 50, a level we haven’t seen since the major supply disruptions of 2022. This high implied volatility makes buying options expensive, but holding unhedged positions is even riskier. We believe using options to define risk is the most sensible approach right now.<\/p>\n
Even before this crisis, the market was tight, a fact we saw in the Energy Information Administration’s (EIA) data showing consistent inventory draws through March and early April 2026. The International Energy Agency’s last monthly report had already pointed to a global supply deficit for the second quarter. The Hormuz disruption, which affects nearly 21 million barrels of oil per day, is amplifying a pre-existing problem.<\/p>\n
Given the sharp potential moves in either direction, strategies that profit from volatility, such as straddles or strangles, should be considered. These allow a trader to benefit from a large price move without having to correctly guess the direction of the breakout. Simple directional bets through futures contracts carry immense risk if diplomatic news suddenly shifts the narrative.<\/p>\n
We must also watch for small signs that the blockade is not absolute, as these could cap price gains. The successful passage of an ADNOC LNG tanker to India suggests some energy flows are continuing, which might prevent a full-blown panic. Closely monitoring ship-tracking data for any increase in tanker traffic will be a critical leading indicator for us.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" WTI rose near $95.20 as Hormuz stayed mostly shut, tightening supplies; Iran sought ceasefire terms, US balked.<\/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-46026","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\/46026","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=46026"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/46026\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=46026"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=46026"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=46026"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}