WTI rose on Thursday after gaining 4.9% the day before, reaching about $66.38 a barrel. That was its highest level since August 2025. Prices climbed on reports of rising US-Iran tensions and the risk of supply disruptions in the Middle East. The Strait of Hormuz carries about 20% of global oil shipments.

Geopolitical Risk Premium Builds

US President Donald Trump said talks with Iran were still ongoing and suggested a possible outcome in about 10 days. Nuclear negotiations earlier in the week did not produce a breakthrough. The Times reported that the UK is blocking the US from using Royal Air Force bases for possible strikes on Iran. This added more uncertainty to the outlook. On the daily chart, WTI moved back above key moving averages, including the 200-day simple moving average near $62.20. The price action still shows higher highs and higher lows. The RSI was near 63, above 50. The ADX was around 28, and the Average True Range was 2.05. Resistance is in the $66.00–$67.00 area, with $70.00 as the next level if price breaks higher. If WTI drops below the 200-day SMA, the 100-day SMA near $59.83 may provide support. The next support level after that is around $56.00.

Options Strategies For A Binary Window

With WTI near a six-month high around $66, the market appears to be pricing in a meaningful geopolitical risk premium linked to the US-Iran situation. This tension is the main driver right now, so it makes sense to focus on strategies that can handle a binary outcome over the next ten days. Recent Energy Information Administration (EIA) data supports the bullish tone: crude inventories fell by 2.7 million barrels last week, a larger draw than expected. That tightens supply even before any potential disruption. The “10 days” timeline is pushing implied volatility higher. That makes options more expensive, but it also creates opportunities. Any position should be built for a sharp move, because a diplomatic breakthrough could erase recent gains just as quickly as an escalation could push prices higher. Strategies like long straddles or strangles can benefit from a big move in either direction, especially if they expire just after this ten-day window. For a bullish view, call options with strikes at or above $70 target the next major psychological level. Because premiums are elevated, bull call spreads may be a cheaper way to express this view, while limiting both cost and maximum profit. This approach also aligns with the technical setup, where a break above the $66–$67 resistance zone could open the way higher. At the same time, it is important to plan for a fast de-escalation that would remove the risk premium. As a hedge, put options with strikes below the key 200-day moving average support near $62 can offer downside protection. If a deal is announced, the downside move could be quick, so puts can act as insurance for any long exposure. This pattern has appeared before. In early 2020, oil prices spiked on military headlines and then later pulled back. That history shows geopolitical rallies can fade quickly, which strengthens the case for tight risk management. Sensitivity is even higher now because the Strait of Hormuz—central to this tension—handles about 21 million barrels per day, or roughly one-fifth of global consumption based on recent shipping figures. All of this is happening while supply is already tight, with OPEC+ holding production quotas through the end of the quarter. In that environment, even a small disruption could have an outsized impact on prices. Positions over the coming weeks should stay flexible: the technical trend is up, but the market can swing sharply on a single headline. Create your live VT Markets account and start trading now.

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