Iran’s Foreign Minister Abbas Araghchi said on Friday, during European trade, that Tehran condemns actions by the US navy involving two Iranian tankers. He described the moves as aggressive acts and as violations of the truce, according to Iranian state media and Reuters.
He said that when a diplomatic solution is presented, the US chooses military action. He also said that Iranians do not bow to pressure.
Markets Still Dismissing Geopolitical Signals
Araghchi rejected a claim about Iran’s missile inventory and launcher capacity being at 75% compared with 28 February. He said the correct figure is 120%.
Markets showed no immediate reaction to his comments, with no clear change in global risk sentiment.
The market is currently ignoring these comments, treating them as simple political noise. We see this as a clear mispricing of geopolitical risk, especially given the direct threat to oil tankers. Any actual move by the US navy could trigger a rapid and severe escalation.
The most immediate risk is to the global oil supply, as roughly 21% of the world’s daily petroleum consumption passes through the Strait of Hormuz. We saw how Brent crude futures jumped over 30% in a matter of weeks back in early 2022 on supply fears, and this situation is arguably more direct. Buying out-of-the-money call options on Brent or WTI for the coming weeks is a prudent way to position for a potential supply shock.
Cross Asset Contagion And Portfolio Hedges
This tension will not remain confined to the oil market if it escalates. We remember how the shipping disruptions in the Red Sea last year, in 2025, caused short-term spikes in the CBOE Volatility Index (VIX) and put pressure on global equities. Hedging long equity portfolios with VIX call options or index puts is now considerably cheaper than it will be after the first real incident.
The specific claim of missile capacity being at 120% should be taken as a signal of intent and capability, not just rhetoric. It suggests a low threshold for retaliation, meaning any event could spiral much faster than market participants currently expect. This makes cheap protection on broad market indexes like the S&P 500 particularly attractive right now.
In this environment, capital will inevitably flow towards safe-haven assets if tensions worsen. We anticipate strengthening in the US Dollar and a potential spike in gold prices as traders de-risk their portfolios. Derivatives on the US Dollar Index or gold futures therefore offer a compelling hedge against instability flaring up in the Middle East.
