WTI rose for a second day and traded near $98.00 on Tuesday, the highest since 13 April. Brent was at $111.21, while the Strait of Hormuz remained closed for a ninth week.
Reuters cited a US official saying Donald Trump was unhappy with Iran’s peace plan because it did not cover the nuclear programme. US Energy Secretary Chris Wright said the president was focused on a trade deal with Tehran and that “historic agreements” would be announced in Europe.
Market Drivers And Geopolitical Risk
Hormuz is a route for about 20% of global crude supply, and its closure has kept prices near $100. UN Secretary-General Antonio Guterres warned of a global food emergency if the closure continues.
From mid-April lows below $80, WTI has kept an upward trend and tested resistance near $98.00. On a 4-hour chart, RSI was 67 and MACD stayed positive.
A move above $98.15 could open the way to $100.00 and then $106.60, last seen as a cap on 7 April. Support levels are $91.10, then $85.20, with $78.88 as the 17 April low.
WTI is a US crude benchmark traded via Cushing and is known as light and sweet. Prices are shaped by supply and demand, the US dollar, geopolitics, OPEC output, and weekly API and EIA inventory reports, which are within 1% of each other 75% of the time.
Options Strategies And Price Scenarios
We are seeing a similar pattern to what happened in 2025, when stalled US-Iran talks pushed WTI crude to $98 a barrel. With prices currently firm around $89.50, any escalation in current Middle East tensions could trigger a rapid move higher. The market remains highly sensitive to supply disruptions, just as it was back then.
Supply is already tight due to the ongoing OPEC+ voluntary production cuts, which have taken over 2 million barrels per day off the market through the second quarter. The EIA recently noted that these cuts are keeping global oil inventories below the five-year average, providing a strong floor for prices. This underlying tightness means any new disruption will have an outsized impact.
The closure of the Strait of Hormuz in 2025 showed us how quickly a key waterway shutdown can affect prices. We are now witnessing a sustained disruption in the Red Sea, with Suez Canal transits down more than 50% year-on-year as tankers take the longer route around Africa. This has effectively reduced near-term supply to Europe and added a significant risk premium to the price of crude oil.
Given this bullish setup, buying call options is an attractive strategy to capture potential upside. We are looking at out-of-the-money calls, particularly with strike prices around the psychological $95 and $100 levels, for late May and June contracts. This offers a defined-risk way to profit from a sharp price spike driven by an unexpected event.
We also see an opportunity in the options market’s implied volatility, which has been elevated. Selling cash-secured puts at downside support levels, such as the $85 strike, could be a way to collect premium while expressing a view that prices are unlikely to fall significantly. This strategy benefits from both time decay and the expectation that geopolitical risk will keep prices supported.
