Attention in the crude oil markets focuses on the upcoming Alaska meeting about Ukraine’s ceasefire negotiations.
by VT Markets
/
Aug 15, 2025
Crude oil markets are paying close attention to an upcoming meeting between US President Donald Trump and Russian President Vladimir Putin in Alaska. A key topic will be a possible ceasefire in Ukraine.
The conflict has affected crude oil prices by reducing the amount of Russian oil available to global markets. Currently, Brent oil prices are stable in the Asian morning trading session.
Short Term Volatility
The meeting on Friday could lead to significant short-term volatility for crude oil prices. The outcome is unpredictable, creating a situation where prices could rise or fall dramatically. Implied volatility in Brent options has recently increased, reaching around 35 due to this uncertainty.
If the discussions do not result in a ceasefire, we expect the current risk factor to stay in the prices. Russian exports remain limited at about 9.5 million barrels per day, and a report from the IEA in July 2025 shows strong demand growth. This may lead traders to buy call options, which could benefit if geopolitical tensions keep crude prices high or push them higher.
On the other hand, if a credible ceasefire is reached, we might see a significant sell-off as the war-related risk factor leaves the market. Recall that Brent prices surged above $120 a barrel when the conflict began in 2022. A resolution could quickly reverse those price increases, favoring traders who hold put options or put spreads, betting on a sharp decline in Brent prices.
Strategies for Capitalizing
With high implied volatility leading up to the meeting, we expect this volatility to decrease once the outcome is revealed. Traders can take advantage of this by selling premium through strategies like short straddles or strangles. This approach profits from the anticipated “volatility crush,” regardless of whether prices move up or down, as long as the movement isn’t too extreme.
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by VT Markets
Aug 15, 2025
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