Commodities Report: Supply Disruption Deepens

Option flow anaylsis $USO $GLD $SLV $URA $COPX $GDXJ

Hello Traders,

Geopolitical risk is being aggressively repriced this morning following a series of overnight strikes on vessels near Basra and drone attacks on Oman’s Salalah Port. Iranian officials have upped the ante, threatening a $200-per-barrel price target unless their diplomatic demands are met. We are seeing a massive 'de-coupling' in the market: Oman crude futures are surging to all-time highs due to the immediate blockade of the Strait, while WTI remains a laggard as traders weigh the impact of the record-breaking 400-million-barrel IEA reserve release.

Oman Crude futures vs Brent futures (Source: Bloomberg )

Equity futures gapped lower overnight as regional supply disruptions in Asia intensified. The CCP has implemented a strategic export ban on refined petroleum products and Urea to safeguard domestic inventories and stabilize local pricing. This protectionist shift is exacerbating shortages of gasoil across Southeast Asia, sending spot prices to new highs. Markets are now pricing in the secondary effects of this 'resource nationalism,' which threatens global agricultural yields and industrial output.

Now let’s go straight into today’s commodities options flow update: