Trading terms glossary A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - X - Y - Z - W West Texas Intermediate (WTI) West Texas Intermediate (WTI, also referred to as Texas Light Sweet) is an oil benchmark that is central to oil commodity trading. It is one of the three major oil benchmarks used in trading, along with Brent crude and Dubai/Oman. Working Order A Working Order typically refers to either a stop or limit order to open.
Working Orders are used to advise your broker to execute a trade when your desired tradable asset reaches a specified price. Learn more about Working Orders
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Trading terms glossary A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - X - Y - Z - G Gapping Gapping is when the price of an asset moves higher or lower without any price activity in-between the pre-gap and post-gap prices. Learn more about Gapping. GDP Also known as Gross Domestic Product (GDP), it is the total value of goods and services manufactured in a country over a period of time.
It can also be used as the size and health indicator of a country's economy. Gearing ratio Gearing is a measurement of a company's financial leverage. In this context, leverage is the amount of funds acquired through creditor loans – or debt – compared to the funds acquired through equity capital.
Gross margin The amount of profit a company makes from its revenue is termed as Gross margin. GTC order This stands for `good `till cancelled` and is an instruction to buy or sell an asset at a specific limit. The order will remain valid and working in the market until it is either filled or cancelled.
Trading terms glossary A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - X - Y - Z - W West Texas Intermediate (WTI) West Texas Intermediate (WTI, also referred to as Texas Light Sweet) is an oil benchmark that is central to oil commodity trading. It is one of the three major oil benchmarks used in trading, along with Brent crude and Dubai/Oman. Working Order A Working Order typically refers to either a stop or limit order to open.
Working Orders are used to advise your broker to execute a trade when your desired tradable asset reaches a specified price. Learn more about Working Orders
Trading terms glossary A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - X - Y - Z - V Variable costs Variable cost refers to an expense which is subject to change when a products sales volumes change. Costs will typically increase or decrease when sales drop or rise, respectively. VIX Short for the Chicago Board Options Exchange Volatility Index, the VIX is used to track S&P 500 index volatility.
It is arguably the most well-known volatility index on the market. Learn more about VIX Volatility A market’s volatility is its likelihood of making major, short-term price movements at any time. A high level of volatility can provide opportunity to make profitable trades in a short period of time.
Learn more about Volatility Volume Volume in trading refers to the amount of a particular asset being traded over a certain period of time. It's typically presented alongside price information and offers an extra dimension when examining the price history of an asset. Learn more about using Volume in trading.
Volume-weighted average price VWAP is a technical analysis tool which shows the ratio of an asset's price to its total trade volume. the VWAP provides traders with a measure of the average price a stock has traded at over a given period of time.
The 8 April ceasefire announcement and parallel discussions around a 45-day truce have not resolved the Strait of Hormuz disruption. They have, for now, capped the worst-case scenario, but tanker traffic remains at a fraction of normal levels and Iran's demand for transit fees signals a structural shift, not a temporary one.
What began as a regional conflict has become a global energy shock, and the question for markets is no longer whether Hormuz was disrupted, but how permanently the disruption changes the pricing floor for oil.
Key takeaways
Around 20 million barrels per day (bpd) of oil and petroleum products normally pass through the Strait of Hormuz between Iran and Oman, equal to about one-fifth of global oil consumption and roughly 30% of global seaborne oil trade.
This is a flow shock, not an inventory problem. Oil markets depend on continuous throughput, not static storage.
If the disruption persists beyond a few weeks, Brent could shift from a short-term spike to a broader price shock, with stagflation risk.
Tanker traffic through the strait fell from around 135 ships per day to fewer than 15 at the peak of disruption, a reduction of approximately 85%, with more than 150 vessels anchored, diverted, or delayed.
A two-week ceasefire was announced on 8 April, with 45-day truce negotiations under way. Iran has separately signalled a demand for transit fees on vessels using the strait, which, if formalised, would represent a permanent geopolitical floor on energy costs.
Markets have begun rotating away from growth and technology exposure toward energy and defence names, reflecting a view that elevated oil is becoming a structural cost rather than a temporary risk premium.
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The Strait of Hormuz handles roughly 20 million barrels per day of oil and petroleum products, equal to about 20% of global oil consumption and around 30% of global seaborne oil trade. With global oil demand near 104 million bpd and spare capacity limited, the market was already tightly balanced before the latest escalation.
The strait is also a critical corridor for liquefied natural gas. Around 290 million cubic metres of LNG transited the route each day on average in 2024, representing roughly 20% of global LNG trade, with Asian markets the main destination.
The International Energy Agency (IEA) has described Hormuz as the world’s most important oil transit chokepoint, noting that even partial interruptions may trigger outsized price moves. Brent crude has moved above US$100 a barrel, reflecting both physical tightness and a rising geopolitical risk premium.
Source: US Energy Information Administration, dated June 17, 2025, using 2024 daily average
Tankers idle as flows slow
Shipping and insurance data now point to strain in real time. More than 85 large crude carriers are reported to be stranded in the Persian Gulf, while more than 150 vessels have been anchored, diverted or delayed as operators reassess safety and insurance cover. That would leave an estimated 120 million to 150 million barrels of crude sitting idle at sea.
Those volumes represent only six to seven days of normal Hormuz throughput, or a little more than one day of global oil consumption.
Updated shipping and insurance data now confirm more than 150 vessels have been anchored, diverted, or delayed, up from the 85 initially reported. The 1.3 days of global consumption coverage from idle crude remains the binding constraint: this is a flow shock, not a storage problem, and the ceasefire has not yet translated into meaningfully restored throughput.
🌋 Trump, volatility and Hormuz.
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Oil markets function on continuous movement. Refineries, petrochemical plants and global supply chains are calibrated to steady deliveries along predictable sea lanes. When flows through a chokepoint that carries roughly one-fifth of global oil consumption and around 30% of global seaborne oil trade are interrupted, the system can move from equilibrium to deficit within days.
Spare production capacity, largely concentrated within OPEC, is estimated at only 3 million to 5 million bpd. That falls well short of the volumes at risk if Hormuz flows are severely disrupted.
GO Markets — Idle Tankers: Days of Cover
Oil market analysis
How long do idle tankers last?
135M idle barrels — days of cover against each demand benchmark
vs. Strait of Hormuz daily flow (20M bbl/day)
6.75 daysof Hormuz throughput covered
6.75 days
0
5
10
15
20
25
30 days
vs. Global oil consumption (104M bbl/day)
1.3 daysof world demand covered
1.3 days
0
5
10
15
20
25
30 days
vs. US Strategic Petroleum Reserve release (1M bbl/day)
135 daysof full SPR release pace covered
135 days — but SPR exists to replace this role
0
5
10
15
20
25
30 days
135M
idle barrels on tankers (midpoint of 120–150M range)
~33%
of daily Hormuz flow that is idle storage, not transit
<31 hrs
is all idle storage against global daily consumption
Indicative market trajectories based on disruption severity
Scenarios for the weeks ahead
1–2 WEEKS
Ceasefire catch-up
Markets face catch-up repricing. Brent could consolidate in the US$105–US$115 range as risk premia unwind. Brent may trade lower (US$95–US$110) if strategic stocks bridge the temporary shortfall.
2–4 WEEKS
Infrastructure blitz
Shifts to structural supply shock. Brent moving toward US$150–US$200 cannot be ruled out. This is the stagflation trigger where energy costs constrain central bank flexibility.
STRUCTURAL
Geopolitical floor
Iran's transit fee demand creates a permanent input cost. The pre-crisis price structure (US$60–US$70) may not return, embedded in insurance and freight rates.
Critical Threshold
US$120 remains the level at which energy inflation becomes a direct Federal Reserve policy problem.
Inflation risks and macro spillovers
The inflationary impact of an oil shock typically arrives in waves. Higher fuel and energy prices may lift headline inflation quickly as petrol, diesel and power costs move higher.
Over time, higher energy costs may pass through freight, food, manufacturing and services. If the disruption persists, the combination of elevated inflation and slower growth could raise the risk of a stagflationary environment and leave central banks facing a difficult trade-off.
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What makes the current episode particularly acute is the lack of slack in the global system.
Global supply and demand near 103 million to 104 million bpd leave little spare cushion when a chokepoint handling nearly 20 million bpd, or about one-fifth of global oil consumption, is compromised. Estimated spare capacity of 3 million to 5 million bpd, mostly within OPEC, would cover only a fraction of the volumes at risk.
Alternative routes, including pipelines that bypass Hormuz and rerouted shipping, can only partly offset lost flows, and usually at higher cost and with longer lead times.
Bottom line
Until transit through the Strait of Hormuz is restored and seen as credibly secure, global oil flows are likely to remain impaired and risk premia elevated. For investors, policymakers and corporate decision-makers, the core question is whether oil can move where it needs to go, every day, without interruption.
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