Operational Performance · April 2026
The market consensus viewed the supply side with more concern about excess than about a shortage. That consensus, in my view, had a significant crack: It wasn't pricing in the risk of supply disruptions in the Persian Gulf. This is a breakdown of how a convergence of OSINT and derivatives flow signals foreshadowed that tension, and of the asymmetric trade that capitalized on it.
The context
The week began with some background noise: for weeks, the Trump administration had been adopting a notably tougher stance toward Tehran—expanded sanctions, «maximum pressure 2.0» rhetoric, and, more significantly, a operating language which went beyond the usual coercive diplomacy.
The backdrop was a WTI trading in the $70–$72 range, under pressure from Chinese demand data and the prospect of a potential OPEC+ agreement to increase production, with Brent crude following a similar trend. The market continued to focus on the supply side, with more concern about excess than about shortages. I believe that consensus had a significant flaw: it was not pricing in the risk of supply disruptions in the Persian Gulf.
The Strait of Hormuz is the most critical energy bottleneck on the entire planet. Approximately 20 million barrels per day, equivalent to 20% of global crude oil consumption. Any military action—or even the credible threat of one—has the potential to cause the price per barrel to spike sharply and rapidly. That was the asymmetry I was looking to exploit.
Reading and mental processing
In open-source intelligence (OSINT), the key is not to identify an isolated «military aircraft,» but to detect patterns. Over the course of 72 hours, various sources began to point to a convergence of indicators consistent with the prospect of military action against Iran in the near future.
Using Flightradar24, I detected a significant increase in military aircraft traffic in Northern Europe and, in particular, at allied bases in the Eastern Mediterranean. These were not isolated flights, but rather an unusual number of takeoffs for a non-holiday Monday, with flight paths consistent with a gradual logistical deployment eastward. A trend sustained over 48 hours was a clear sign of fuel-oriented logistics prepositioning.
According to MarineTraffic and open-source defense sources, the aircraft carrier USS Gerald R. Ford had entered the Mediterranean, bringing the total to 17 U.S. warships deployed in the Middle East, with assets in the Persian Gulf and the Arabian Sea. The largest U.S. aircraft carrier does not move on a whim: its deployment involves weeks of planning and political decision-making at the highest levels. The operational narrative was beginning to come together.
Statements began circulating in which Trump openly mentioned a limited attack on Iranian nuclear infrastructure. What was significant was not the content (which had precedents), but the registration: A sitting president rarely speaks in those terms without an underlying operational plan. The tone was unusually direct, lacking the typical strategic ambiguity. I interpreted it as a clear attempt to apply pressure: the window for a decision was open.
Specialized media outlets such as Breaking Defense y War on the Rocks They published analyses that, while not confirming anything, set the stage for a window of opportunity for military action in February and March. This type of leak—gradual, decentralized, and without a single source—is often more reliable than a front-page headline, precisely because it does not follow a strategic communication narrative.
Since February 25, WTI has shown a growing geopolitical risk premium. The most significant factor was not the spot price, but rather the forward curve: The contango was narrowing, with short-term contracts gaining value relative to long-term ones. This was a sign that the physical market—which is the best-informed—was anticipating an impending supply crunch. Added to this was a rise in open interest in short-term out-of-the-money (OTM) call options: investors were urgently buying protection against a potential price rise. Buy on the rumor, sell on the news.
The VIX remained high without crashing: the market had not ruled out the tail risk scenario. The data point that concluded the analysis was the asymmetric skew on USO options and in crude oil futures (CL): the implied volatility of calls was significantly higher than that of the equivalent puts. The options market, which has historically been more efficient at incorporating private information, suggested that the risks were more bullish than bearish, and that this asymmetry was a recent development.
Structure of the thesis
Taken together, these indicators pointed to a scenario centered on three distinct risk factors, any one of which would have put upward pressure on oil prices:
The reasoning behind the position was asymmetrical. If this scenario did not materialize, WTI/Brent could pull back from its current levels, with a limited loss (the premium paid). If any of these scenarios were to materialize, the upward movement would be rapid and sharp. That risk-reward asymmetry was at the heart of the trade.
Execution
I posted the entry on Friday, February 27, on Brent futures ($COIL) in a long position via call options with a strike price of 80.
Friday as an entry day was no accident. In a geopolitical scenario of this nature, the weekend risk acts as an amplifier: The markets close, but events don’t—especially given Trump’s track record. Any development on Saturday or Sunday—a statement, a troop movement, a leak—could result in a bullish gap on Monday, impossible to capture from a flat position. Taking that risk was part of the strategy.
The sizing was adjusted based on the level of conviction (high) and the distance to the point at which the thesis would be invalidated. Risk management was simple: the maximum loss was the premium paid. A structure that, combined with the natural convexity of options, offers a favorable risk-reward profile, especially in a binary event with the potential for a sharp move.
Result
Source: Price of the June ’26 Brent Crude Oil 80.00 Call contract · Barchart · Prepared by the author (schematic chart, not to market scale).
I didn't wait for the move to run its course: when the market starts moving sharply in your favor, the priority is to lock in profits, not to maximize the final portion.
The catalyst that triggered the move was the gradual buildup of the same signals I had already identified the previous week, but amplified by massive media coverage. The price shift did not occur at the outset, but rather as a result of a subsequent escalation amid lingering uncertainty, in a market that was slow to process what the sources of OSINT and the flow of derivatives already anticipated several days in advance.
The option price went from 3.75 to 32.25 per contract, which represents a profitability of +769,27% accurate, in an operation carried out on February 27 to March 9: just 14 days.
Frequently Asked Questions
A long position via call options on Brent futures (strike price 80), opened on February 27, 2026, in response to a convergence of signals pointing to potential military action against Iran and supply tensions in the Persian Gulf. The contract rose from $3.75 to $32.25, a return of +769% over 14 days, closed on March 9.
OSINT (open-source intelligence) involves identifying patterns based on publicly available information. Here, Flightradar24 (unusual military air traffic in the Eastern Mediterranean), MarineTraffic (arrival of the aircraft carrier USS Gerald R. Ford), public statements from the Trump administration, and analyses from defense think tanks were used to construct a thesis regarding the risk of supply disruption.
Approximately 20 million barrels of oil pass through the Strait of Hormuz each day, accounting for nearly 20% of global crude oil consumption. It is the most critical energy bottleneck on the planet: any military action or credible threat can cause the price per barrel to rise rapidly and sharply, creating a risk-reward imbalance that this operation sought to exploit.
The narrowing of the contango in the WTI forward curve (short contracts were gaining value relative to long contracts), the rise in open interest in short-term OTM calls, a persistently high VIX, and an asymmetric skew in options on USO and crude oil futures, with implied volatility in calls significantly higher than that of equivalent puts.
Markets by Diego is the financial analysis platform of Diego García del Río, a Spanish economist and independent private investor, and founder of Hill Valley Consulting. He publishes asset analyses, macroeconomic reports, and strategies involving options and leveraged ETFs, along with tracking of actual trades in international markets.
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