Iraq has confirmed that gas supplies from Iran are still flowing smoothly, despite recent Israeli airstrikes in the area. This news comes at a time of rising tensions. After a brief drop, oil prices are on the rise again. West Texas Intermediate (WTI) crude is now priced at $72.96 per barrel, showing a 6% increase for the day. Iraq has stated that its gas imports from Iran remain steady, even as Israeli military actions raise concerns in the region. This statement aims to ease worries about possible interruptions to energy supplies, which could affect larger markets. Gas-powered generation is vital for Iraq’s electricity supply, and disruptions to these imports could lead to power shortages. Meanwhile, WTI crude is experiencing a sharp increase, now trading at $72.96 per barrel, recovering by 6%. This rise follows a short decline, likely due to uncertainties surrounding security in the Middle East and changes in short-term demand. Brent crude is also showing signs of recovery, supporting the view that the earlier decline may have been an overreaction. Steady energy demand in Asia and ongoing refinery activity in the U.S. suggest that the market’s appetite for crude remains strong. Current price movements seem to reflect a broader reassessment by energy market players about the stability of supply routes. While Iraqi gas imports from Iran appear secure for now, there are still worries about the overall fragility of connected supplies. With energy futures climbing quickly, we’ve noticed that pricing for options has increased as traders seek protection against price fluctuations. Volatility measures, especially for near-term contracts, indicate a higher risk that may continue over the next two weeks. Institutional traders are acting more strategically, often adjusting their positions sooner than usual. Following rising tensions in the eastern Mediterranean, we noticed a significant increase in call options at the $75 and $80 levels for short-term WTI contracts. This suggests preparation for possible rapid price changes. The actions of traders, including hedgers and short-term buyers, highlight how responsive this month has become to unexpected geopolitical events. Hosseini’s recent remarks about stable exports have made bearish trades more cautious. He assured that there won’t be a drop in deliveries, giving some confidence to industrial users. Still, the persistence of backwardation suggests ongoing medium-term uncertainty, reflecting that peace-of-mind assurances in the media aren’t enough to fully calm the market. In this current climate, sharp reactions to news are becoming standard practice. Any updates from Tehran or Tel Aviv could not only affect spot prices but also impact future contracts, particularly those for the second and third months of WTI, which are currently more sensitive to changes. Therefore, the timing of market reactions is as crucial as the direction. We are monitoring concentration in open interest by strike price, noting that the distribution is heavily clustered in the upper ranges. Traders are gradually increasing delta—not as a mass response, but through more cautious risk management. This clustering could create pressure in the next 10 to 12 sessions, especially if macroeconomic data diverges from current energy market expectations. As broader volatility indices remain stable across other asset classes, any widening of crude derivatives might only affect commodity-related markets for now. However, it’s evident that no trading positions, even those considered hedged, are fully protected in this climate, where political statements and regional tensions can significantly impact intraday trading volumes. Looking ahead, the next challenge appears to be updates on U.S. inventory data and signals from Iranian exports, both of which often influence prices even before they are officially released. We plan to adjust our positions proactively, especially around expiry times when liquidity may be low. When energy prices are closely tied to news, balancing flexibility and risk management becomes essential.

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