Brent crude saw sharp price moves linked to changing war-related messages from Washington and low market liquidity. Brent fell to $93 per barrel, then rose above $102, with futures later at $100.2 and earlier levels around $115.
Reuters reported larger-than-expected suspicious trading ahead of White House announcements about easing tensions and subsequent price falls. The activity totalled about $7bn across March and April.
Liquidity And Headline Driven Price Swings
Low liquidity was linked to fewer active traders, with algorithmic trading and oil producers making up much of the remaining market participation. Price reactions were described as sensitive to frequent and sometimes conflicting official signals.
Tensions rose again after comments that a deal could be reached soon, followed by threats of bombing Iran if it rejects a one-page US proposal. Other developments included a mandatory application to transit the Strait of Hormuz via the “Persian Gulf Strait Authority”, and reports the US may revive Project Freedom to escort commercial vessels through Hormuz after renewed access to Gulf bases and airspace.
Further reports referred to renewed attacks involving Iran, the US, and the UAE in the Persian Gulf. Trump told ABC News the ceasefire remained intact, while Iran’s Press TV, cited by Bloomberg, reported it had been violated.
We saw this kind of extreme volatility last year, where oil prices swung nearly 10% in a single day based on conflicting headlines. This environment, marked by thin liquidity, means options premiums are high but also that sharp, profitable moves can happen quickly. Derivative traders should be prepared for this pattern to continue in the near term.
Options Positioning For Volatile Crude
The price action we witnessed in 2025 is very similar to past geopolitical shocks. For example, the CBOE Crude Oil Volatility Index (OVX), a key measure of oil price fear, has historically spiked during conflicts, as it did following the invasion of Ukraine in 2022. This suggests that the current market is primed for exaggerated moves on any news related to Middle East tensions.
Given that the drop from $115 was seen as premature, traders should consider buying call options to position for a potential price spike. This strategy allows for participation in any sudden upward moves driven by renewed conflict while limiting the maximum loss to the premium paid. This is a cautious way to maintain bullish exposure in a market where sentiment can turn instantly.
The underlying physical risk at the Strait of Hormuz creates a strong floor for prices. The U.S. Energy Information Administration (EIA) has consistently reported that roughly one-fifth of the world’s daily oil supply passes through this chokepoint. Believing that this fundamental supply risk will prevent a total price collapse, traders could sell out-of-the-money put options to collect premium.
Looking ahead through May and June of 2026, we are entering the peak summer driving season in the Northern Hemisphere, which typically boosts demand for crude oil. This seasonal support, combined with the ongoing geopolitical risk, makes a significant price drop less likely than a sudden spike. Using bull call spreads could be an effective strategy to target upside while defining risk and lowering the entry cost.
