WTI traded near $98.00 on Tuesday, up 3.21% on the day and at its highest level since mid-April. The move followed rising tensions in the Middle East as talks between the United States and Iran remained stalled.
Reuters reported that US President Donald Trump viewed Tehran’s peace proposal as inadequate, citing missing commitments on Iran’s nuclear programme. The deadlock has extended the closure of the Strait of Hormuz, a route used for about 20% of global oil supply.
Middle East Tensions Lift Oil
The supply disruption supported crude prices and pushed WTI towards $100. Brent also rose, pointing to tighter conditions across energy markets.
UN Secretary-General Antonio Guterres warned that a prolonged closure could lead to a global food crisis. Citibank projected Brent could reach $150 per barrel if the Strait of Hormuz stayed closed through the end of June.
We look back on the events of 2025 as a critical lesson in how quickly geopolitical heat can roil energy markets. The deadlock in US-Iran negotiations and the subsequent closure of the Strait of Hormuz was a stark reminder of supply-side fragility. That situation mechanically drove WTI prices to their highest levels since mid-April of that year, just shy of the $100 psychological barrier.
While the most extreme forecasts of $150 per barrel did not materialize, we did see Brent crude peak at $138 in the fourth quarter of 2025 before a fragile diplomatic resolution reopened the strait. The memory of that volatility spike, where implied volatility on front-month crude options jumped over 60% in a matter of weeks, still influences market psychology today. We learned then how systemic the consequences could be, with the UN warning of a potential global food crisis due to the disruption.
Market Setup In 2026
Now, on April 29, 2026, the market is facing a different kind of pressure, this time from robust demand rather than a major supply disruption. Recent data shows China’s crude imports for the first quarter of 2026 surged by 9.5% year-over-year, far exceeding analyst expectations. This unexpected demand, coupled with OPEC+ holding firm on production discipline, is creating a familiar tightness in the market.
Given the memory of 2025’s rapid price escalation, traders should consider positioning for upside risk in the coming weeks. Buying out-of-the-money call options on WTI, such as the July 2026 $105 or $110 strike prices, offers a defined-risk way to capture a potential sharp move higher. The low volatility we’ve seen in early 2026 makes these options relatively inexpensive compared to the levels seen during the Hormuz crisis.
For those with a more cautious outlook, establishing bull call spreads would be a prudent strategy. By selling a higher-strike call against a purchased call, traders can reduce the initial cost and profit from a moderate rise in oil prices. This approach provides an attractive risk-reward profile if WTI grinds higher toward the $100 level but does not experience the explosive rally of 2025.
