Bullish option traders are logging impressive gains in the United States Oil Fund (USO) as the Iran conflict triggers a historic disruption to global energy flows.
On Feb. 26, our Unusual Activity Service identified significant bullish call buying, with 2,000 20March 84 calls bought in one order for $3.75 above the existing open interest of 720 contracts, with USO trading at $80.81.
Those 20March 84 calls traded as high as $12.04 today with the fund at $93.68, delivering impressive returns of approximately 221.07% from the entry price of $3.75. Meanwhile, USO shares gained approximately 15.93% from the initial trading level of $80.81, demonstrating how options can deliver significantly amplified returns compared to simply owning the underlying security.
This performance illustrates the power of options leverage when the directional thesis proves correct, though it’s important to note that this same leverage can work against traders when market moves go in the opposite direction.
Strait of Hormuz Effectively Closed, Stranding 20% of Global Oil Supply
The timing of the February 26th call buying proved remarkably prescient, as just two days later Operation Epic Fury triggered the most severe disruption to global oil flows in modern history. Following the U.S. and Israeli strikes on Iran that killed Supreme Leader Ali Khamenei on February 28th, Iran’s Revolutionary Guard Corps broadcast warnings via international distress frequency that the Strait of Hormuz was closed and any vessel attempting passage would be “set ablaze.”
The strait—a 21-mile-wide waterway between Iran and Oman—carries approximately 20 million barrels of oil per day, representing roughly 20% of global seaborne oil trade. By March 1st and 2nd, ship tracking data showed zero tanker traffic through the strait for the first time in history. At least 150 vessels, including crude oil and LNG tankers, dropped anchor in open Gulf waters, stranded as shipping companies and insurers withdrew from the region following at least five tanker attacks that killed two personnel.
Brent crude surged as much as 13% from Friday’s close of $73 per barrel to over $82 per barrel by Monday trading, with analysts warning prices could push toward $100 per barrel if disruptions persist beyond several weeks. West Texas Intermediate briefly touched $75.33—its highest level since June 2025—before settling around $72.30 per barrel. The price spike directly benefited USO, which tracks the price of WTI crude oil futures.
Major container shipping giants including Maersk and Hapag-Lloyd suspended all transits through the strait and related routes. War-risk insurance premiums exploded from 0.125% to between 0.2% and 0.4% of ship insurance value per transit—adding a quarter-million dollars in costs for very large crude carriers. The insurance market’s withdrawal created a de facto closure even more complete than a formal Iranian naval blockade.
Energy analyst Claudio Galimberti of Rystad Energy emphasized the unprecedented nature of the crisis: “We have not seen anything like this in pretty much the history of the Strait of Hormuz. It’s like blocking the aorta in a circulatory system.” The strait’s role is especially critical for Asian markets, with China, India, Japan, and South Korea accounting for 69% of all crude oil flows through the waterway in 2024.
Iran had strategically ramped oil exports to multi-year highs throughout February in anticipation of the strikes, front-loading supply to reduce vulnerability. Saudi Arabia and other Gulf producers attempted similar moves, but those barrels have now largely cleared physical storage. Any sustained production loss carries limited buffer, meaning the world faces acute supply tightness if the closure extends beyond the current week.
The crisis also threatens liquefied natural gas supplies, with approximately 22% of global LNG trade transiting the strait. European natural gas prices surged more than 20% following the closure, while jet fuel markets face particularly severe disruption as 30% of Europe’s jet fuel supply originates from or transits the waterway.
The convergence of Operation Epic Fury on February 28th, the effective Strait of Hormuz closure, sustained Iranian retaliatory strikes across the Gulf, and unprecedented tanker stranding created ideal conditions for the March 20th call options to capture explosive upside. The timing of the call buying on February 26th at 1:43 PM—positioned just 48 hours before the largest disruption to global oil flows in history—demonstrates the exceptional nature of the unusual options activity that preceded one of energy markets’ most dramatic supply shocks in decades.
USO was last up 7.52% at $93.75.
