Market selectivity ignores U.S. maritime blockade, futures positions shift indicating panic sentiment is...

The situation around Iran and the Strait of Hormuz remains tense, yet oil prices have slightly declined, a phenomenon that seems counterintuitive, but this reflects that market focus is on the future rather than the current situation.
Trump's hints that the war could end soon help soothe market sentiment. Traders are betting that the conflict will be resolved and that oil transportation in the region will return to normal. Although risks remain high, this optimism has been enough to cool the heat in the oil market.
However, the actual situation has not substantively improved. The U.S. has increased pressure, implementing maritime blockades against ships related to Iran, and the security challenges in the Strait of Hormuz still persist. In other words, oil supplies have not returned to normal, but the market is currently choosing to ignore these disruptions.
This puts the oil market between two forces: recent supply restrictions, and the market’s belief that such restrictions will not last. Whether oil prices will continue to fluctuate downward in the future may depend on which expectation the reality leans toward in the coming days.
One way to gauge how traders are pricing this balance is to observe the crude oil calendar spread. The sharp rise in oil spreads highlights traders’ extreme concern over short-term supply, with near-month contracts priced far above longer-term contracts. But the recent pullback indicates that as hopes for de-escalation increase, some panic is easing. Nonetheless, the spread remains high, indicating that the market is still factoring in a significant risk premium rather than returning to normal.
Additionally, recent crude oil futures position data show that large speculators and asset managers have increased their total short positions over the past two weeks. While it’s still premature to say the war is over, this at least suggests that some oil traders have begun to place speculative bets on this. Although total long positions have also increased, in recent weeks both types of traders’ net long exposure have been declining.
Overall, crude oil futures traders seem to be testing the idea that the worst wartime phase may be over, but they are far from convinced. In any case, concerns still exist, and current oil prices are still about $20 higher than pre-war levels.