WTI crude oil fell on Thursday, giving up earlier gains as markets became calmer about the US-Iran ceasefire. It traded near $92.00 a barrel after reaching $95.20 earlier in the day.
WTI dropped nearly 10% on Wednesday after the United States and Iran agreed to a two-week truce. Doubts later rose after Iran said three parts of the ceasefire had been breached following Israeli strikes on Lebanon.
Ceasefire Uncertainty Drives Volatility
Israel said the ceasefire does not cover its conflict with Hezbollah in Lebanon. Iran said it does and warned it could leave the deal if attacks continue.
These events raised worries about disruption to shipping through the Strait of Hormuz. MarineTraffic data showed the first non-Iranian oil tanker has passed through the strait since the ceasefire was announced.
Israeli Prime Minister Benjamin Netanyahu said he told his cabinet to start direct talks with Lebanon. NBC, citing a US official, reported President Donald Trump urged Israel to cut back strikes on Lebanon to support talks with Iran.
Saudi Arabia reported halted operations at several energy sites after attacks, via the Saudi State News Agency. The Khurais and Manifa fields were hit, cutting about 300,000 bpd each, and damage to the East-West pipeline reduced throughput by about 700,000 bpd.
Market Strategy And Risk Management
Looking back at the events of 2025, we are reminded of how quickly geopolitical headlines can whip the oil market around. The near 10% price drop followed by a sharp rebound on the fragile US-Iran ceasefire showed extreme volatility. This memory of WTI swinging from over $95 down to the low $90s in a day serves as a critical lesson for today’s market.
Given that experience, we should be prepared for sudden price swings driven by news rather than just supply-and-demand fundamentals. A smart play would be to use options to bet on this volatility itself. For instance, strategies like long straddles or strangles, which involve buying both a call and a put option, could profit from a large price move in either direction.
However, the situation today on April 10, 2026, is fundamentally different and suggests less immediate upside risk. The latest International Energy Agency (IEA) report revised global oil demand growth for 2026 down to a modest 1.2 million barrels per day, citing a sluggish economic outlook in Europe and parts of Asia. Furthermore, recent data from the US Energy Information Administration (EIA) shows a consistent build in commercial crude inventories over the last four weeks, reaching their highest level since last summer.
With WTI currently trading around a calmer $85 per barrel, the high implied volatility that made options expensive during last year’s crisis has subsided. This makes it a more affordable time to purchase protection against unexpected events. We can consider buying out-of-the-money call options as a cheap hedge against a sudden flare-up in Middle East tensions.
The Saudi supply disruptions from 2025, which took over a million barrels per day offline, highlight how vulnerable infrastructure remains. Even with today’s softer demand picture, we cannot ignore the risk that a similar event could send prices soaring past $90 again. Therefore, a defined-risk strategy like a bull call spread could allow us to profit from a modest price rise while capping our potential losses.
