Oil dismissed Iran strikes and ship attacks — buy energy before the geopolitical
Thesis
Oil has been sliding recently, with prices hitting their lowest levels since the start of the war as traders price in a de-escalation of conflicts. However, the combination of the U.S. striking Iran and a ship being attacked in the Strait of Hormuz shows the region is far from stable. Even though Saudi Aramco has resumed loading oil, the physical proximity of these attacks to critical supply routes makes the current calm in prices vulnerable. A single headline about delayed shipments could force traders who bet against oil to rush for the exits, creating a rapid spike in energy prices.
Strategy approach
Build a long volatility strategy on crude oil (CL=F or USO). Enter long when front-month oil futures are within 2% of their 20-day low AND there is a breaking news event within the last 48 hours involving military action in the Middle East or a disruption to the Strait of Hormuz. Exit if oil breaches the 20-day high or after a 15-day holding period. Use a tight 4% stop loss.