Last month, I wrote the following:
With the US threatening Iran with military force, and as long as the situation remains tense and uncertain, for February I expect West Texas Intermediate oil prices to range between $60 to $70 per barrel. If the situation is resolved peacefully, then I expect oil prices to drop into the mid- to high $50s or low $60s. If the situation becomes kinetic, then all bets are off.
…
Of course, the only item currently known that really matters for February 2026 is whether the US decides to launch military action against Iran. I am hoping that the two sides can reach an agreement without the use of force. My expectation, however, is that the US will take some type of action against Iran.
Those were my thoughts at the end of January. Events have since taken a dramatic turn.
Overnight into Saturday, February 28, I learned that Israel and the United States had launched coordinated strikes against Iran. Because the situation has become kinetic, all bets are off. That means it is impossible to know what to expect regarding West Texas Intermediate oil prices in the days and weeks ahead—other than that WTI should trade higher than Friday’s close of about $67. How much higher depends on how the conflict unfolds.
I currently hold some short WTI put options with strike prices well below Friday’s close; these expire this Friday, March 6. Once they expire, my plan is to sit on my hands and take no new positions until the conflict ends. No one knows how long that will take—it might be days or weeks.
Traders everywhere are waiting for the all-clear signal to short oil. So as the conflict winds down, many expect a sharp reversal. Commodities often overshoot on both the upside and downside. Do not be surprised, therefore, if WTI drops to the mid-$50s—or even lower—once the war ceases and shorts pile in.
Energy Aspect’s Amrita Sen and Jeff Currie provided an interesting and helpful discussion in “Jeff Currie – The ‘global oversupply myth’ and return of the old economy | EA Forum Ep. 15.” The “global oversupply myth” seems to be losing some traction. Currie appears quite bullish, discussing the possibility of oil hitting $250. That price seems too high to me. Even so, it is always good to consider viewpoints different from your own. No one has a crystal ball.
Wrapping up, because of the war with Iran, all bets are off. I do not have a price forecast for the period ahead. Instead, I am waiting for the conflict to end before reassessing the WTI oil price environment.
I hope the war is brief with a minimum of harm. And equally, I hope the Iranian people gain their freedom and are able to fully participate in the global community.
Disclosure: Short WTI put options.