Brent crude fell after a sharp two-day jump tied to US–Iran tensions. Deutsche Bank said part of the “weekend risk premium” was fading, even though reports still pointed to possible US strikes on Iran. The report mentioned a recent build-up of US forces in the region. It also cited the New York Times, which said Donald Trump is considering an initial targeted strike on Iran in the coming days. A larger attack could follow if Iran does not meet US nuclear demands.

Market Reaction And Risk Premium

Brent was down -1.21% at $70.85 per barrel at the time of publication. Deutsche Bank also said this was Brent’s biggest two-day rise since October 2025. Over the week, Brent gained +5.92%, including a +0.14% rise on Friday. The article said it was created with help from an artificial intelligence tool and reviewed by an editor. Brent has eased back to around $70.85/bbl, but this looks like a small pullback as traders remove weekend risk premium—not a major shift in outlook. The risk of a US strike on Iran is still keeping the market on edge. Traders should expect fast, headline-driven moves in either direction. This tension is also showing up in options. Implied volatility has risen, and the CBOE Crude Oil Volatility Index (OVX) is near 45—well above its recent average. That makes options more expensive. Protecting long physical positions with puts, or using call spreads to position for a spike, may make sense, but the upfront cost is high.

Historical Parallels And Supply Shock Risk

October 2025’s sharp two-day jump was a reminder of how quickly oil can move on geopolitical news. A similar example was the 2019 attacks on Saudi Aramco facilities, which briefly pushed prices up nearly 20%. These events highlight how exposed supply is to conflict in the region. If military action occurs now, the price reaction could be much larger than what we saw last year. The main risk remains the Strait of Hormuz. It is a critical chokepoint, and nearly 20% of global oil consumption—about 21 million barrels per day—still passes through it. Even a small disruption could quickly push prices higher, potentially taking Brent well above $85. Because of this, holding unhedged short positions in the coming weeks carries unusually high risk. Create your live VT Markets account and start trading now.

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