Geopolitical tensions spur demand for oil options — Bloomberg

The oil options market has seen a surge in activity amid rising tensions in the Middle East, as reported by Bloomberg. Fearing possible disruptions in energy supplies, market participants are actively purchasing call options, which give them the right to buy oil at a fixed price in the future.

Soni Kumari of ANZ Banking Group says that ongoing tensions in the region threaten the global oil market. The blockade of the Strait of Hormuz, which facilitates the daily passage of approximately 17 million barrels of oil, would be an especially alarming outcome, leading to a sharp increase in prices. In anticipation of such an event, investors are seeking to hedge their risks.

The growing concern among market participants is evident in the active movement of capital between various trading instruments, according to Bloomberg. At the beginning of the week, a significant volume of transactions involving future oil delivery contracts was recorded, amounting to roughly 20,000 lots within the first five minutes of trading. Call options priced above $80 per barrel were in particularly high demand. The news agency concludes that this demonstrates traders' expectations of a significant increase in oil prices in the near future.