Brent crude is trading near USD 96 per barrel after sharp intraday moves linked to Middle East news. It almost reached USD 100, then fell below USD 95 following Israel–Lebanon reports, before rising again to about USD 96–97.
Brent crude futures were priced at USD 96/bbl at the time of writing. Market pricing also reflects a higher risk premium linked to the region.
Strait Of Hormuz Disruption
Ship traffic through the Strait of Hormuz remains heavily disrupted at less than 10% of normal levels, despite a US–Iran ceasefire. Iran is directing vessels to transit near Larak Island, citing mine risks.
Reports say Iran may introduce cryptocurrency transit tolls, with opposition reported from Western leaders and the International Maritime Organization. Peace talks between the US and Iran, mediated by the Pakistani prime minister, are due to start on Saturday, but disagreements over the agenda persist.
Tensions also remain over whether the ceasefire should cover Lebanon, following Israel’s deadly attacks there on Wednesday. The article notes it was produced using an AI tool and reviewed by an editor.
With Brent crude currently trading more calmly around $85 a barrel, we are reminded of the extreme volatility in 2025. Last year’s intraday swings between $95 and $100 showed how sensitive prices are to Middle East headlines. This past instability suggests traders should remain positioned for sudden supply-side shocks.
Positioning And Volatility Strategies
The paralysis of the Strait of Hormuz in 2025, which saw traffic fall below 10% of the normal 21 million barrels per day, is a critical historical lesson. That event demonstrated how quickly geopolitical risk gets priced into options, causing implied volatility to surge. We should therefore watch for any naval buildups or diplomatic friction in the region as a leading indicator.
In the coming weeks, we should consider strategies that profit from price movement itself, not just direction. During the 2025 crisis, the oil volatility index (OVX) soared above 60, levels not seen since early 2022, rewarding holders of long straddles. With the OVX now sitting near a calmer 35, such positions could be a relatively cheap hedge against a repeat event.
The failed US-Iran talks last year served as a clear trigger for bullish call-buying strategies. We must be ready to deploy similar tactics if diplomatic channels appear to fray once more. Conversely, any unexpected progress on sanctions or maritime security would be a signal to protect against a sharp price drop with put options.
We must also factor in OPEC+ behavior, which was a secondary factor during the 2025 scare. The cartel’s spare capacity, estimated today at around 3.5 million barrels per day, is our main buffer against a price spike. Any statements from key members suggesting an unwillingness to use this buffer would be a strong bullish signal for front-month futures contracts.
