US President Donald Trump posted on Truth Social that he ordered the United States Navy to “shoot and kill” any boat placing mines in the Strait of Hormuz. He wrote that Iran’s naval ships are “ALL, 159 of them, at the bottom of the sea”.
He also said US mine “sweepers” are clearing the Strait and ordered that work to continue at “a tripled up level”. He added, “There is to be no hesitation.”
Immediate Oil Market Focus
In a second post, Trump said Iran is struggling to identify its leader and referred to infighting between “Hardliners” and “Moderates”. He wrote that the “Hardliners” have been “losing BADLY on the battlefield”.
Trump stated that the US has “total control” over the Strait of Hormuz and that no ship can enter or leave without US Navy approval. He said it is “Sealed up Tight,” until Iran can “make a DEAL”.
The report says tensions between the US and Iran are rising and markets remain in risk-off mode. It adds that there was no immediate market move, while the US Dollar kept intraday gains against all major rivals.
Given the new “shoot and kill” order for the Strait of Hormuz, the immediate focus must be on crude oil. With about a fifth of the world’s daily oil consumption passing through that narrow channel, any military action will cause a massive supply shock. We should be buying out-of-the-money call options on Brent and WTI futures for the coming weeks, anticipating a rapid price spike above $100 a barrel.
The market’s quiet reaction is a window of opportunity to position for a surge in volatility. This kind of direct military threat is being underpriced, so we should look to buy call options on the VIX. Looking back at the conflicts of the early 2020s, we saw the VIX easily jump from the teens into the high 20s or 30s on geopolitical news, and this is far more direct.
Equity Downside Protection
This is a classic risk-off signal that will hit the broader equity markets hard. We need to protect our portfolios by purchasing put options on indices like the S&P 500. The relative stability we saw for much of 2025 is clearly over, and investors will flee from stocks into safer assets.
We have seen how quickly these situations escalate, and the historical data is clear. When drone attacks hit Saudi oil facilities back in 2019, Brent crude jumped almost 20% in a single day. The current language is far more aggressive, suggesting any disruption could be more severe and last much longer.
The US Dollar is already showing strength, and we should expect this trend to continue as it acts as a global safe haven. We can use options to position for further dollar strength against currencies tied to global growth. At the same time, we should consider buying gold call options, as the precious metal is a traditional hedge against military conflict and inflation caused by higher energy prices.
