US President Donald Trump called on allies on Saturday to help secure the Strait of Hormuz. The Wall Street Journal reported that the White House plans to announce that several countries have agreed to form a coalition to escort ships through the corridor. In a Truth Social post, Trump said “many countries” affected by Iran’s attempted closure of the strait would send warships with the United States to keep it open and safe. He listed China, France, Japan, South Korea and the UK among countries he wanted to take part.

Coalition Talks And Escort Timing

The Wall Street Journal said talks are continuing about the timing of any operations. It reported that discussions include whether escorts would begin before or after hostilities end. Iran’s media operations centre warned residents in Dubai and Doha of possible attacks in the coming hours, according to Iran Press TV. It claimed US military personnel are based in those locations. With nearly a fifth of the world’s daily oil supply passing through the Strait of Hormuz, we must anticipate a sharp spike in crude prices. We should be looking at buying call options on WTI and Brent futures, as this provides upside exposure if the situation worsens. This strategy allows us to profit from rising prices while limiting our maximum loss to the premium paid for the options. The escalating threats create significant market uncertainty, which means volatility is likely to rise. We should consider purchasing call options on the VIX, which historically moves opposite to the S&P 500 during periods of fear. We saw a similar dynamic during the flare-ups in 2019 and 2022, where even the threat of conflict sent volatility indexes soaring before any actual shots were fired.

Portfolio Hedges And Energy Upside

Higher energy costs act as a tax on the global economy and can hurt corporate profits, especially for transportation and industrial companies. To hedge our portfolios, we should consider buying put options on broad market indices like the SPY or specific sector ETFs like JETS for airlines. History shows that every US recession in the last 50 years, looking back from 2025, was preceded by a sharp increase in the price of oil. At the same time, we should expect oil and gas producers to benefit directly from higher commodity prices. Buying call options on energy sector ETFs, such as the XLE, or on individual oil majors offers a direct way to profit from this specific trend. We remember how the energy sector was the market’s top performer during the last major price surge we saw back in 2024 and 2025. However, we must also prepare for a sudden de-escalation, as a diplomatic breakthrough could cause oil prices to collapse just as quickly as they rose. Using option spreads, like bull call spreads on oil futures, can help manage this risk by capping both our potential gains and losses. This more defined approach protects us from a sharp reversal if the planned coalition successfully secures the waterway without incident. Create your live VT Markets account and start trading now.

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