Israel’s Prime Minister Benjamin Netanyahu said Israel “acted alone” in an attack on Iran’s South Pars gas field, as tensions rise over strikes on energy infrastructure in the region. The BBC reported the comments on Thursday. He said Iran has no capacity to enrich uranium or make ballistic missiles after 20 days of war. He said it is too soon to tell if Iranians will take to the streets.

Netanyahu Says Israel Acted Alone

Netanyahu said the US and Israel destroyed Iran’s fleet in the Caspian Sea. He said there are many possibilities for a ground component, but he would not share them. He said he would not put a stopwatch on ending the war. He also said Donald Trump asked Israel to hold off on future attacks like the one on South Pars. West Texas Intermediate (WTI) was down 0.64% at $93.40 at the time of writing. Looking back at the Israeli strike on South Pars in 2025, we see the initial market reaction was misleadingly calm. Today, with Brent crude trading over $115 per barrel due to sustained disruption, that conflict’s long tail is clear. The key takeaway for the coming weeks is that any statement from regional powers, no matter how small, can reignite extreme volatility.

Market Volatility And Hedging Strategies

We should therefore consider buying long-dated call options on crude oil to protect against sudden upside spikes. Implied volatility in the energy sector has remained stubbornly high, with the OVX (Cboe Crude Oil ETF Volatility Index) hovering near 55, a significant premium over its historical average. This indicates the market is still pricing in a high probability of another disruptive event. The initial drop in WTI prices back when the attack was announced reminds us of a classic pattern where fears of demand destruction from a prolonged war temporarily overshadow supply shocks. We saw a similar dynamic in the first weeks of the 2022 Ukraine conflict before supply realities took hold. Any sign of slowing global growth, such as the recent PMI data from China coming in at a contractionary 48.7, could trigger this pattern again and offer a brief window to enter long positions. Given the direct hit was on a major gas field, we must also focus on natural gas derivatives. With European TTF futures already elevated as the continent struggles to refill storage ahead of next winter, any further tension makes these contracts extremely sensitive. Current EU gas storage levels are at a five-year low of just 38% full for this time of year, leaving no buffer for another supply crisis. The American request for Israel to hold off on further attacks creates a ceiling on the conflict, suggesting that all-out regional war remains a less likely scenario. This presents an opportunity for traders to sell very high-strike, out-of-the-money call options, betting that American intervention will cap the ultimate peak in oil prices. This strategy allows us to collect premium while acknowledging the geopolitical guardrails that are in place. Ultimately, the open-ended nature of that conflict continues to fuel global inflation, with the last US CPI report for February 2026 showing an unexpected rise to 4.1%. This stagflationary environment suggests that positions shorting broad equity market futures, such as the E-mini S&P 500, could serve as a valuable hedge. The risk of a conflict-induced economic slowdown remains as potent as the risk of an oil price spike. Create your live VT Markets account and start trading now.

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