Iran and the US are having direct talks, with US special envoy Steve Witkoff speaking multiple times by phone with Iranian Foreign Minister Abbas Araqchi. These discussions come after Israel’s recent strikes on Iran, according to Reuters. As a result, oil prices have risen to $74.82, up by $1.32. Araqchi has stated that Tehran won’t resume negotiations unless Israel stops its attacks. Washington kicked off the initial call and proposed a new solution to break the deadlock caused by differing positions. Current events suggest ongoing conflicts but also a chance for a quick resolution.

Direct Communications Between the United States and Iran

The article outlines direct communications between the US and Iran after the Israeli strikes. Witkoff has made several calls to Araqchi, indicating a notable change in diplomatic strategy, especially with rising tensions and previously firm positions. Tehran has firmly stated that they will not engage in future talks unless Israel halts military action. This creates a strict condition, hinting that diplomacy might falter again quickly. On the other hand, Washington seems to be taking a more proactive approach, opening discussions and offering a “new proposition.” While specifics are limited, it appears this effort seeks to resolve old disagreements by redefining the issues at stake, suggesting a more flexible approach compared to earlier attempts. There’s a possibility for practical compromises rather than strict ideological agreements. In light of this, global oil prices are adjusting quickly—rising to $74.82, up by $1.32—indicating rising concerns about supply chains or potential disruptions. This noticeable increase reflects cautious interest in energy markets, rather than a definitive expectation of escalation or de-escalation.

Market Hesitation and Strategic Positioning

This indicates that price movements are starting to recognize the potential for significant change in the region. When this occurs, implied volatility typically rises, particularly around crude-linked assets and currencies tied to energy imports or exports. We expect contracts linked to Brent or WTI to show sensitive forward curves. Keep an eye on the two-month skew—if risk-on sentiment grows, we may see a softening in downside protection. It’s wise to consider options with rolling expirations over the near term. If holding straddles or strangles, adjusting for directional bias may not be necessary at this point—the news can still swing sharply in either direction. However, it’s essential to frequently review put-call ratios, as they often lead futures volumes when fundamentals intertwine with geopolitical issues. Given Tehran’s strict condition, be ready for a slower pace of results than anticipated. Such a mismatch can create temporary price dislocations, offering short-term inefficiencies in futures spreads and gamma trades. These price gaps don’t last long— they tend to close quickly once headlines change, but those who act swiftly usually benefit the most. We’re observing market hesitation without a clear pivot, creating a narrow window for positioning ahead of more clarity. For now, delta hedging strategies should remain flexible, and covered calls may require reevaluation if oil begins to create a tight range. It’s not about predicting calm or chaos. It’s about understanding when the market starts adjusting its views. Create your live VT Markets account and start trading now.

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