US Treasury Secretary Scott Bessent said on Fox News on Monday that the US is opening up the Strait of Hormuz and has \u201cabsolute control\u201d of it, according to Reuters. He said Iran does not control the strait.<\/p>\n
Bessent said the US is firing only when fired upon. He also said now would be a good time for international partners to increase pressure on Iran.<\/p>\n
He said he thinks the market will be very well supplied. He said he is aware that gas prices are affecting Americans, but expects prices to come down quickly when the conflict ends.<\/p>\n
The US Dollar Index showed no immediate reaction to the comments. It was last up 0.12% on the day at 98.32.<\/p>\n
We are being told the Strait of Hormuz is under control and that the market will remain well supplied. However, this official reassurance clashes with the current high-risk environment for oil transit. Derivative traders should view this as an attempt to manage market sentiment rather than a reflection of a risk-free situation.<\/p>\n
The CBOE Crude Oil Volatility Index (OVX) has surged to near 55 in recent weeks, a level we haven’t seen since the supply chain shocks of 2025. This indicates the options market is pricing in significant price swings, directly contradicting the calm projected by officials. We should therefore consider strategies that profit from this high volatility, such as purchasing straddles on Brent crude futures.<\/p>\n
While officials state they are only firing when fired upon, any miscalculation could halt the nearly 18 million barrels of oil that pass through the strait daily. We remember how drone attacks in mid-2019 caused Brent futures to spike over 14% in one trading session. Given this history, buying out-of-the-money call options on crude oil for the coming months offers a limited-risk way to position for a potential escalation.<\/p>\n
The statement that gas prices will come down “when the conflict ends” is a key tell, as it offers no concrete timeline. This uncertainty is a direct opportunity for energy sector trades. We can use options on energy ETFs like the XLE to hedge or speculate on continued strength in oil producers, who benefit from the elevated risk premium.<\/p>\n
The US Dollar’s muted reaction suggests the currency market is already treating the dollar as a safe haven amid the conflict. Sustained tension will likely continue this trend, supporting a long USD position against the currencies of major oil-importing nations. We see this as a lower-volatility way to maintain exposure to the ongoing geopolitical risk.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Bessent claims US has absolute control of Strait of Hormuz, urges pressure on Iran, expects gas prices fall.<\/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-46543","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\/46543","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=46543"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/46543\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=46543"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=46543"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=46543"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}