Oil spiked from $69 to ~$150 in a few months, and every major oil spike (Gulf War, Iraq War, Russia-Ukraine) has eventually retraced. Long-dated puts on USO (Dec 2028, $80 strike) allow time for the geopolitical premium to fade or for a recession to crush demand. Bet on mean reversion in oil prices as war/conflict ends and Trump’s policies lead to economic slowdown. Escalation in Middle East, prolonged supply cuts by OPEC+, or sustained inflation keeps oil elevated; USO contango can erode put value even if spot oil drops.
Oil spiked from $69 to ~$150 in a few months, and every major oil spike (Gulf War, Iraq War, Russia-Ukraine) has eventually retraced. Long-dated puts on USO (Dec 2028, $80 strike) allow time for the geopolitical premium to fade or for a recession to crush demand. Bet on mean reversion in oil prices as war/conflict ends and Trump’s policies lead to economic slowdown. Escalation in Middle East, prolonged supply cuts by OPEC+, or sustained inflation keeps oil elevated; USO contango can erode put value even if spot oil drops.