Oil Price Plunge: Four Datasets Clash on Iran Peace Deal Impact

Brent crude is getting hammered, down nearly 20% in a month as Trump claims a deal with Iran is all but done. The narrative is simple: peace means the Strait of Hormuz reopens, supply floods back, and prices collapse. This is the story the market is currently trading, pushing prices to their lowest in two months.

But the devil is in the details, and the details are murky. No final documents are signed, and Iran's stance remains ambiguous. This disconnect between Trump's pronouncements and on-the-ground reality is creating a divergence in market signals. The futures curve, for instance, shows a significant collapse in the prompt spread, indicating a fading panic for immediate supply. This suggests traders are betting on peace, but not fully.

Prediction markets, however, paint a different picture, pushing out the odds of a permanent deal. Polymarket data shows traders giving a signed agreement low probability in the short term, with odds migrating towards later months. This implies a lingering doubt that the peace narrative is fully baked into current prices, especially given Trump's history of premature deal announcements.

Options data adds another layer of confusion. While recent call buying on oil ETFs suggests some bullish bets, the open interest data tells a different story. It indicates that new bullish positions aren't sticking, and traders might be buying cheap upside protection against a deal collapse rather than outright betting on a sustained rally. This suggests a market caught between conflicting probabilities, with significant upside or downside risk still on the table.