Preliminary data released by ICE Futures Europe and cited by Bloomberg reveals that traders established a record volume of bearish bets against oil on Tuesday, with Brent put option volume exceeding 764,000 contracts.
Put options generate financial returns when market prices descend past a designated threshold. Certain major transactions executed on Tuesday will only yield a payout if crude prices decline from roughly $96 to approximately $70 by the arrival of December.
Record Bets Against Oil Target $70 by December
Activity within the December $70/$69 put spreads alone surpassed 110,000 contracts. This type of spread combines two options separated by one dollar, which limits both the potential expenditure and the ultimate payout. These specific configurations only generate a profit if the global oil benchmark, Brent, falls underneath the $70 mark.
Nevertheless, the record volume overstates unequivocal bearish sentiment. The ICE data indicates that narrow spreads accounted for more than 50% of the volume registered on Tuesday. Market participants frequently deploy these spreads to hedge pre-existing positions rather than making outright directional wagers.
Why Oil Fell More Than 10% in Eight Days
Brent changed hands close to $106 on September 14. By Tuesday, the benchmark briefly dipped below $98, marking its sixth consecutive daily decline and the longest losing streak witnessed since August 2025. This downward slide undid a rally fueled by military conflict while the Strait of Hormuz remained largely closed.
The sell-off was triggered by two primary catalysts. First, American envoys Jared Kushner and Steve Witkoff held discussions with Iranian Foreign Minister Abbas Araghchi at the United Nations General Assembly, a three-hour meeting that received praise from President Donald Trump.
“They had a very good meeting, a very productive meeting,” Al Jazeera reported, citing Trump.
Iran conveyed that it could potentially reopen the Strait of Hormuz within a week if Washington reduced military pressures. Additional conditions outlined by Tehran involve terminating the U.S. naval blockade targeting Iranian ports and unfreezing sovereign assets.
Second, Hydrocarbon Processing reported that Saudi Aramco brought its East-West pipeline back online on Tuesday. This infrastructure transports petroleum toward the Yanbu port on the Red Sea, bypassing the Strait of Hormuz. Drone strikes had forced the pipeline offline on September 13.
What Stands Between Oil and $70
Crude markets stabilized on Wednesday according to TradingView metrics, with Brent spot hovering near $96.64 and U.S. crude advancing 1.1% to reach roughly $94.63. A descent to the $70 level would demand an extra drop of approximately 28%.
As of yet, no formal agreement between the United States and Iran has been finalized. Furthermore, the Saudi pipeline resumed operations at a restricted capacity, and an intelligence security source indicated that restoring the full flow of roughly 4 million barrels per day could require several weeks.
JPMorgan elected to withdraw its forecasting baseline earlier in the month, stating that modeling the ultimate conclusion of the conflict was no longer feasible.
Frequently Asked Questions
How many Brent put option contracts were traded on Tuesday?
Volume in Brent put options reached a record-breaking 764,000 contracts on Tuesday, according to preliminary ICE Futures Europe data.
What factors caused oil prices to drop over 10% in eight days?
The downward movement was driven by U.S.-Iran diplomatic talks at the UN General Assembly regarding the Strait of Hormuz, alongside the reopening of Saudi Aramco’s East-West pipeline.
How far would oil prices need to fall to reach $70?
Reaching $70 would require an additional price decline of roughly 28% from spot values near $96.64 for Brent and about $94.63 for U.S. crude.
Are all the recent put option trades clear bearish bets?
Not entirely. Narrow spreads accounted for over half of Tuesday’s volume, and market participants often utilize these options to hedge existing portfolios rather than making purely directional bets.
