Supply Concerns Ease
Supply worries also eased after crude exports from Iraq’s Kirkuk fields to Turkey’s Ceyhan port resumed via pipeline. The restart followed an agreement between Baghdad and the Kurdistan Regional Government earlier this week. Geopolitical risks continued to support price concerns due to attacks on energy sites in the Middle East. Iran launched missile strikes on a Qatari site hosting the world’s largest LNG export facility after an Israeli attack on Iran’s South Pars gas field. US President Donald Trump said he had prior knowledge of the Israeli strike and urged restraint on further attacks on Iranian energy assets. Saudi Arabia said it stopped an attempted attack on a gas facility, and officials reported four residents injured by falling shrapnel in Riyadh. Missiles intercepted in the UAE were reported to be aimed at a gas facility and an oil field. This added to concerns about wider risks to energy infrastructure.Volatility Strategy Focus
We are seeing WTI prices ease to around $97.80, which seems at odds with the escalating geopolitical risks in the Middle East. The partial easing of Venezuelan sanctions and the Jones Act waiver are introducing new supply, but these are likely temporary fixes. This creates a highly uncertain environment, perfect for volatility plays in the coming weeks. The latest Energy Information Administration (EIA) report showing a surprise crude inventory draw of 3.1 million barrels complicates the picture, suggesting underlying demand remains strong. This drawdown works against the bearish sentiment from the new supply announcements. For traders, this means any bearish move could be short-lived and face strong support. Given these opposing forces, expecting a clear directional trend is risky, so we should consider strategies that profit from volatility itself. Options strategies like long straddles on front-month contracts could be effective. This approach allows us to capitalize on a large price swing whether it is up or down. Looking back at the events of late 2025, the Iranian missile strikes and attempted attacks in Saudi Arabia are creating a risk premium we have not seen in some time. We recall the 2019 Abqaiq attack, which caused an immediate 15% price spike before production was restored. The current situation feels even more precarious, suggesting any actual supply disruption would have an explosive effect on prices. We should also be skeptical about the immediate impact of the Venezuelan supply, as was the case when sanctions were first eased back in 2025. Reports from February 2026 showed that production is still struggling to exceed 900,000 barrels per day due to years of infrastructure decay. This means the actual barrels hitting the market may be far less than headlines suggest. The 60-day waiver of the Jones Act from the Trump administration in 2025 provides a clear timeline for traders. As we approach the end of that waiver period in the coming weeks, we can anticipate a tightening of domestic fuel logistics. This could create upward pressure on prices, especially for refined products. Create your live VT Markets account and start trading now.
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