US-Iran war or peace?Oil options are more bullish now than they were just after the outbreak of the Russia-Ukraine conflict in 2022, indicating that global markets are on edge over the confrontation between Israel and Iran, and speculation that the United States may join the attack.
As of Tuesday's close, the premium of Brent crude call options relative to put options was the widest since 2013. As the turnover of option contracts has been higher than usual in recent days, a measure of implied volatility has also risen sharply.
The war between Israel and Iran has raised concerns that crude oil export infrastructure could be targeted, which could curb supply and trigger a price surge. On Wednesday, Brent crude oil prices approached $76 a barrel, having previously hit a new high since the conflict broke out in January.
According to ABC, US officials said that the next 24 to 48 hours will be critical and will determine whether the Israeli-Iranian issue can be resolved through diplomatic means or whether Trump will take military action.
Trump summoned his senior advisers in the White House Situation Room on Tuesday. Trump significantly stepped up his rhetoric against the Iranian regime ahead of the meeting, claiming that the United States knew exactly where Khamenei was hiding.
Despite the apparent saber rattling, U.S. negotiators on Tuesday believed Iran was in a weak position and could be forced to return to the table and ultimately accept a deal that would require it to abandon all nuclear enrichment, according to multiple officials involved in the diplomatic process.
The Iranian regime has indicated a willingness to resume discussions with the United States as Iran and Israel trade blows, the officials said, adding that the Trump administration has been seeking more concrete commitments before abandoning its path to war.
If Iran returns to the talks and agrees to abandon uranium enrichment, U.S. officials see a potential high-level meeting led by special envoy Steve Witkoff and Vice President J.D. Vance as soon as this week.
But such a scenario would likely require Iran to act quickly. Trump has acknowledged that his patience with the situation in the Middle East is wearing thin.
Sources familiar with Trump's mindset say he is frustrated by the volatile situation in Iran and the inability to provide the administration with immediate answers, and he seems very reluctant to see Tehran successfully send him a military warning.
The U.S. military is already moving assets to the region, including additional aircraft, a second aircraft carrier and its strike group to the Middle East. Officials say all of these moves are defensive.
Defense Secretary Pete Hegseth spoke about the U.S. posture in the Middle East in an interview with Fox News on Monday, saying, "We are strong, we are ready, we are defensive and we are present."
But while the redeployment of assets is intended to protect the roughly 40,000 U.S. troops stationed in the region, it also leaves options open for the Trump administration if it decides to directly assist Israel's ongoing offensive operations against Iran.
"Our job is to keep options on the table, but our posture remains defensive," one U.S. official said.
One major question is whether the U.S. will deploy B-2 stealth bombers. The heavy strategic bomber is capable of carrying 30,000 pounds of mass destruction and may be able to destroy Iran's deep underground nuclear facility at the Fordow Fuel Enrichment Plant.
Currently, the military's 19 B-2 bombers are based at Whiteman Air Force Base in Missouri. Six of the planes were previously based at an air base on Diego Garcia in the Indian Ocean — closer to Iran. But those bombers were replaced by B-52 long-range bombers that can’t carry the bunker-busting bombs needed to destroy Fordow.
There are already about a dozen U.S. Navy ships patrolling near Bahrain’s territorial waters, according to a U.S. Defense Department official. The ships have no official mission, the official said. They include a littoral combat ship, four minesweepers and six surface patrol boats.
The Navy also has two destroyers, an aircraft carrier in the Red Sea and three other surface ships in the Arabian Sea. Two more U.S. destroyers are stationed in the eastern Mediterranean, each equipped with a missile defense system capable of shooting down Iranian ballistic missiles.
Signs that the Trump administration may be moving toward military action could include canceling the president’s planned trip to the Netherlands next week for a NATO summit.
At a news conference on Tuesday, State Department spokeswoman Tammy Bruce said the summit was still "on the table," but she said things could change depending on dynamics with Iran.
"Things are moving very quickly. So I think anything is possible," she said. TVC:USOIL MARKETSCOM:USOIL SWISSQUOTE:USOILN2025 TVC:USOIL
