WTI US Crude Oil traded just below $63.00 on Monday after a small rise in Asia. It was up less than 0.40% on the day. Prices stayed near an almost two-week low set on Friday, as markets waited for the second round of indirect US-Iran talks later this week. The US and Iran restarted talks earlier this month on Iran’s nuclear program. Officials discussed the possibility of a deal within the next month. Lower expectations of conflict reduced fears of supply disruptions, which pressured oil prices. At the same time, the US sent a second aircraft carrier to the region. It also prepared for the possibility of a longer military campaign if talks fail. Iran’s Revolutionary Guards said they could strike back at US military bases if attacks happen. This kept some geopolitical risk priced into the market. On Friday, softer US consumer inflation increased expectations that the Federal Reserve could cut interest rates in June. The US Dollar saw limited demand, which supported USD-priced commodities like oil. More selling would be needed to confirm a near-term top near $66.25. That level was described as a nearly five-month high reached in January. We are seeing a familiar pattern in the oil markets today, February 16, 2026. West Texas Intermediate is trading near $82 per barrel. The current tension looks similar to April last year, when prices sat in the low $60s. At that time, the market was caught between diplomatic progress and military posturing. That setup may help guide positioning in the coming weeks. A renewed US-Iran nuclear agreement could be a strong headwind for prices, as it was in 2025. Recent reports say Tehran is allowing more cooperation with IAEA inspectors. CME Group data shows crude is already down 3% this month. Traders who expect a deal may consider buying out-of-the-money put options expiring in April. This could benefit from a drop toward the high $70s. Even so, the geopolitical risk premium still matters and should not be ignored. Continued tension in the Strait of Hormuz is a reminder of how quickly supply fears can move the market. This is similar to the military signaling seen last year. During a flare-up in Q3 2025, that premium added more than $5 per barrel. That history suggests long call options can still be a sensible hedge against sudden disruptions. Unlike last year, a stronger US dollar is now weighing on commodities. The January 2026 jobs report was stronger than expected, showing 225,000 new jobs. This reduced expectations for near-term Fed rate cuts. The resulting policy gap is lifting the dollar and limiting oil’s upside. This push-and-pull—bearish diplomatic headlines versus bullish supply risks—is raising implied volatility in options. With uncertainty high, traders may want strategies that can profit from a large move in either direction, not just a single directional view. One example is a long straddle, which buys a call and a put with the same strike price and expiry. This approach can work well when big moves are possible but the direction is unclear.

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