Oil markets remain highly volatile, but the derivatives market is signalling that traders are still positioning for a potential surge in prices. This comes even after crude futures witnessed a sharp correction during the latest session.
On the Multi Commodity Exchange of India (MCX)crude oil futures dropped sharply, falling nearly 12% to around Rs 7,752 per barrelreflecting a rapid unwinding of geopolitical risk premiums.
OPTIONS MARKET SIGNALS MORE UPSIDE FOR OIL
Even as crude prices pull back and Brent spreads ease, the options market is still positioning for higher oil. Traders are paying the largest premium in years for call options on WTI futures relative to puts — a clear sign investors…
— First Squawk (@FirstSquawk) March 10, 2026
Options market positioning for a spike
Despite the correction, the options market suggests that traders continue to expect higher prices ahead. Investors are currently paying the largest premium in years for call options on WTI crude futures compared with put optionssignalling that market participants see a greater risk of a price spike rather than a sustained decline.
Prediction markets are also pointing to higher prices, with year-end forecasts for WTI crude moving above $120 per barrel.
War-driven volatility in oil markets
Oil prices have been extremely volatile since the escalation of the conflict involving Iran, Israeland the United States. The confrontation has raised fears of major disruptions in global energy supply, particularly around the Strait of Hormuzone of the world’s most important oil shipping routes.
These concerns triggered sharp swings in global benchmarks.
Global crude prices remain volatile
WTI crude oil recently surged to around $119–$120 per barrelmarking multi-year highs, before retreating sharply. Prices are currently trading around $83–$89 per barrel amid signs of possible de-escalation and discussions about potential strategic reserve releases.
Brent crude followed a similar trajectory, briefly crossing the $100 per barrel mark before pulling back into the mid-$80s to low-$90s range.
The earlier rally, which saw prices jump roughly 30–35% in early Marchwas driven by panic buying and short-covering as traders priced in the risk of supply disruptions.
Market remains on edge
Although crude prices have corrected in the latest session, the options market indicates that investors still see the risk of another spike if tensions escalate again or if supply routes in the Middle East face further disruptions.
As a result, oil markets are likely to remain highly sensitive to geopolitical developments and supply-related headlines in the coming weeks.
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