As hostilities escalate between Israel and Iran, investors are increasingly betting on rising oil prices, signaling concerns over potential disruptions to energy infrastructure and crude tanker operations. On October 3, 2024, call options, which profit from price increases, were priced higher than put options for the first time since mid-August, indicating a bullish market sentiment.
The heightened risk of conflict in the region has led to a notable shift in trading dynamics, particularly in Asia, where the options market has shown increased bullishness. However, trading activity has been relatively subdued due to a weeklong holiday in China, limiting immediate market reactions.
This development could have significant implications for global energy markets, as any disruption in oil supply from the Middle East could lead to increased prices worldwide, impacting economies dependent on oil imports.
Source: Bloomberg, October 3, 2024.