US President Donald Trump posted on Truth Social on Good Friday that the US could reopen the Strait of Hormuz, take oil, and “make a fortune”. He wrote that it would be a “gusher” for the world.
The US Dollar traded slightly higher on the day after an upbeat March Nonfarm Payrolls report. Trading conditions were thinner due to the Easter holidays, keeping the currency within usual ranges.
Geopolitical Risk In Energy Markets
The comments from last year on Good Friday are a stark reminder of the persistent geopolitical risk priced into energy markets. That rhetoric about the Strait of Hormuz, regardless of its intent, highlights a vulnerability that can be exploited for political gain. Traders should revisit their assumptions about stability in the Middle East.
With Brent crude recently climbing above $92 per barrel on renewed tensions and OPEC+ holding firm on production cuts, the market is already tight. The latest EIA report showed a surprise crude inventory draw of 2.1 million barrels, further supporting prices. We believe long-dated call options on oil futures or related ETFs like USO offer a calculated way to position for a potential supply disruption.
This uncertainty is being reflected in broader market fear, with the VIX climbing back over 18 from lows near 13 earlier in the year. Higher energy costs directly threaten corporate margins and consumer spending, putting pressure on equities. We are looking at buying protective puts on major indices like the SPX to hedge against a sudden downturn.
The US Dollar, however, continues to find support from strong domestic data, with the March 2026 CPI report coming in hotter than expected at 3.1%. This reinforces the dollar’s role as a safe-haven asset during times of international instability. Any escalation in the Gulf would likely trigger flight-to-safety flows, further strengthening the currency.
We only need to look back to the summer of 2019, when attacks on tankers in the Gulf of Oman caused oil to spike over 4% in one day. That period showed how quickly a localized conflict can impact global prices. The market’s memory of such events means any new threat, real or perceived, will be met with a swift and significant reaction.
