The Hormuz Strait has been closed for two weeks, causing oil long positions of hedge funds to surge to the highest level since 2020.

Notice that, as the most volatile week in the history of the crude oil market kicks off, hedge funds' bullish sentiment towards Brent crude has reached its highest level in six years. According to the weekly data on futures and options from the Intercontinental Exchange, fund managers increased their net long positions on the global benchmark crude by 65,438 contracts in the week ending March 10, reaching 351,032 contracts. This is the highest level since February 2020. Meanwhile, data from the U.S. Commodity Futures Trading Commission (CFTC) shows that bullish bets on U.S. crude have also risen to an eight-month high. Bets on rising oil prices have reached their highest level since 2020 The Iran conflict has caused shipping in the Strait of Hormuz to come to a near standstill for almost two weeks, a key chokepoint that typically handles around one-fifth of the world's oil supply. This ongoing disruption caught market participants off guard, as many had previously expected U.S. actions to be "surgical" and precise. The drastic impact on the energy market has led major oil-producing countries in the region to cut production as storage capacity reaches saturation, while some refiners are experiencing contract defaults. In the paper trading markets, several volatility indicators have risen to their highest levels since the Russian invasion of Ukraine. In response, algorithmic traders have maxed out their long positions, and as traders reduce their risk exposure, options trading has shrunk. Oil producers are also flooding the market to lock in future revenues, while consumers are frantically buying hedge instruments to hedge against the soaring prices.