The oil market is treating Trump’s deal with Iran as the end of the war. One veteran oil price forecast suggests the reading is wrong.
Brent crude looks calm, but calm may be the setting. The futures curve and the physical market appear to support it.
Trump’s deal resets the oil mood
Brent (BRN) and WTI (CL) both fell sharply this month as the US-Iran deal came to light.
Vice President J.D. Vance led the talks in Switzerland and announced several accomplishments. The two sides built a mechanism to maintain The Strait of Hormuz is open.
Vance described the framework as a classic Trump deal. He said any unfrozen Iranian assets would buy US soybeans, corn and wheat instead of sending cash to Tehran.
Traders read all this as an easing of supplies. If the strait is reopened and Gulf production returns, the war premium in oil should disappear. This logic has led to the recent decline.
But the deal is far from sealed. Trump threatened new strikes over the weekend, briefly destabilizing the talks.
The ceasefire in Lebanon remains in place Vance’s words, a work in progress. So the market is pricing in peace that is not fully achieved.
One veteran trader sees a rally instead
Dan Decker doesn’t buy quiet. The veteran energy trader warns against this Oil can jump From about $75 to $135 within a month. His condition is simple.
If inventories remain depleted and supply fails to recover, the physical market forces sharp repricing.
Decker’s call is a tail risk, not a base case. But it frames the risks. A deal that slips, or a strait that remains choked, can turn a calm tape into a violent one. But right now, the fast money is leaning in the other direction.
Cryptocurrency traders are shorting oil, but it remains local
Cryptocurrency markets are now trading oil as well. At Hyperliquid, a large financial derivatives site, Brent perpetual crude is attracting real volume. The situation there has turned strongly bearish.
The smart money, portfolios with strong track records, are still net short of about $1.1 million. Public figures and influencers are even shorter than that. One whale that shorted near its wartime highs, around $110, rose by about $400,000.
The financing rate, the recurring fee between buy and sell trades, is about 10% per year. This means that long positions are still paying to hold them, even after oil prices decline. Stubborn bulls are pressed, but they do not let go.
However, there is bear hunting. This offense is a small market, with about $140 million in open positions. A short squeeze here can move the price of Brent, but not global Brent.
The real price is determined in the physical market and futures market, not in the place of cryptocurrencies. The options market tells a more divided story.
Options book is hedging, not flipping
The US Brent Oil Fund (BNO) allows US investors to trade Brent crude via an exchange-traded fund. Her choices hold a useful measure of sentiment. The call/put ratio compares bets on a decline with bets on a rise.
A reading below 1 means calls are dominant, which tends to the upside.
The two readings are split this week. New options volume turned cautious, with the put ratio jumping from 0.06 to 0.32. So traders rushed to buy downside protection as Brent crude fell.
Standing positions tell the opposite story. The open interest ratio fell to 0.09 to 0.07, a more call-heavy book.
This gap is hedging, not surrender. Permanent positions remained long while new inflow bought insurance. It indicates bulls protecting gains instead of turning bearish. The physical market is sending the clearest message of all.
The curve and clock say tight
The Brent crude futures curve refuses to confirm complete clarity. Brent crude for the first month still trades higher than the following month, a condition known as a pullback.
A default means buyers will pay more for oil now than later, a classic sign of tight supply. This spread has narrowed to its lowest level since December 2023. However, it has remained positive rather than turning into excess supply. The physical market still says barrels are scarce.
Prediction markets support this view and agree with Dan Dekker’s Hormuz Choke Potential. In Kalshi, traders see only a 51% chance that traffic in the Strait of Hormuz will return to normal by September.
Full confidence will not arrive until 2027. This timeline is consistent with the EIA, which expects flows to resume in the third quarter and production to recover by early 2027.
The cushion also weakens. US emergency oil reserves fell by 9.1 million barrels last week to 331.2 million, their lowest level since 1983.
So the stock that would cushion any new rise is shrinking, not refilling, which is also in line with Dekker’s oil hypothesis. Iran is now increasing its pressure Mandatory floating insurance for any ship crossing the strait. This keeps the floor under oil even as the war scare fades.
Pisces is the news
See the merchant who contacted Higher than the price of oil. The position sold from $110, according to Nansen data, and is now making significant profits. This entry is a living measure of conviction. As long as short positions remain open, the smart money is still anticipating lower oil prices.
A move to close it would be the first real sign of a bearish bet collapsing.
Lengths tell the other half. They kept pushing the financing, so the stubborn supply never stopped. If supply pressure returns and these buy trades are correct, $135 will stop being a warning and start being a path. Wednesday’s US inventory update is the next clue as to how it will break.
Another sharp decline would support oil bulls, while a sudden rise would give peace trading a clue.
this post Trump’s deal with Iran has crushed oil prices, but the veteran trader expects a $135 shock appeared first on BeInCrypto.
