How to Trade Oil: A Guide to Trading Brent and WTI Amid Current Volatility
Oil prices have swung sharply in August 2026 as the Strait of Hormuz standoff between the US and Iran drags on, with Brent crude pushing toward $89 a barrel and WTI above $83 (CNBC, 11 August 2026). Periods like this attract traders looking to access short-term price moves — this guide explains how oil CFD trading actually works, and the risks involved.
Key takeaway
- Brent crude rose toward $89/barrel and WTI above $83 in mid-August 2026 as Strait of Hormuz talks stalled.
- Oil CFDs let traders speculate on price moves without owning physical barrels, using leverage.
- Leverage magnifies both gains and losses — losses can exceed your initial deposit.
- Oil CFDs, futures, ETFs and energy-company shares each offer different levels of leverage and complexity.
- Risk management tools like stop-loss orders are especially relevant in fast-moving, headline-driven markets like oil right now.
Why Is Oil So Volatile Right Now?
Oil has been one of 2026's most headline-sensitive markets, moving on developments in the US–Iran standoff over the Strait of Hormuz — the shipping route through which a large share of the world's seaborne oil passes.
Strait of Hormuz Disruption and the Brent/WTI Spread
Brent crude, the international benchmark, advanced for a sixth straight session in mid-August 2026 to around $89 a barrel, while US WTI crude traded near $83 (Trading Economics, 12 August 2026). Prices had already gained more than 6% over the prior week as hopes faded for a deal to increase ship traffic through the strait, with WTI futures climbing roughly 5% in a single session to settle at $82.13 (Markets.com, 10 August 2026).
Following the latest gains, Brent was up about 16% compared with levels before the US and Israel's military action against Iran began earlier in 2026 (Al Jazeera, 10 August 2026). Iran's Foreign Ministry has said the strait won't reopen until the US lifts its naval blockade, while the US has said it maintains "total control" over the waterway (CNBC, 10–11 August 2026). The International Energy Agency has flagged a global supply shortfall of around 1.8 million barrels a day this quarter as the disruption continues (Trading Economics, 12 August 2026).
Quick fact
- Ship transits through the Strait of Hormuz fell to just eight vessels on one recent day, down from more than 130 before military action escalated in the region earlier this year (CNBC, 11 August 2026).
- Brent futures for October delivery were trading at $84.42 a barrel and WTI futures for September at $78.83 a barrel in early trading on 10 August 2026, before extending gains later in the week (Euronews, 10 August 2026).
How to Trade Oil with CFDs
A CFD (contract for difference) is an agreement to exchange the difference in an asset's price between when a position is opened and closed. With oil CFDs, you're trading the price movement of Brent or WTI crude without ever taking delivery of physical oil.
Going Long vs Going Short
Because CFDs are derivatives, you can go long (buy) if you expect the oil price to rise, or go short (sell) if you expect it to fall. This flexibility is one reason CFDs are used in volatile conditions — but it also means losses can accumulate quickly if the market moves against the position.
Understanding Leverage and Margin
Oil CFDs are traded on margin, meaning you only need to deposit a fraction of the full position size to open a trade. This leverage magnifies potential profits, but it equally magnifies potential losses relative to the amount deposited.
Losses can exceed your initial deposit when trading with leverage.
Ways to Trade Oil
CFDs are one of several ways to gain exposure to oil price movements. Each route carries a different risk and complexity profile.
| Route | Ownership | Leverage | Complexity |
| Oil CFDs | No physical ownership | Yes — margin trading | Moderate |
| Oil futures | Contractual obligation, expiry dates | Yes — margin trading | High |
| Oil ETFs | Fund unit, tracks oil price/futures | No (typically unleveraged) | Low |
| Energy company shares | Equity ownership | No | Low–Moderate |
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Managing Risk When Trading Volatile Oil Markets
- Stop-loss orders: automatically close a position if the price moves against you beyond a set level.
- Position sizing: trade a size appropriate to your account, not the maximum leverage available.
- Avoid over-trading news: headline-driven markets like oil right now can reverse quickly on a single statement.
- Understand overnight funding charges: holding leveraged positions overnight typically incurs a financing cost.
- Practise first: a demo account lets you test an approach without risking real capital.
IG's risk management tools, including stop-loss and limit orders, are built into the platform for exactly this kind of environment.
FAQ
Is oil trading risky right now?
Yes — oil is currently more volatile than usual due to the Strait of Hormuz standoff. Volatility can create opportunity, but it also increases the risk of rapid losses when trading with leverage.
What moves the oil price?
Supply disruptions (such as shipping route closures), OPEC+ production decisions, US inventory data, and demand expectations tied to global economic growth all influence oil prices.
Can I trade oil without leverage?
Yes — oil ETFs and energy company shares offer unleveraged exposure, though they behave differently from the spot oil price and carry their own risks.
What's the difference between Brent and WTI?
Brent is the international benchmark, largely reflecting seaborne crude from the North Sea and beyond, including flows through chokepoints like the Strait of Hormuz. WTI is the US benchmark, priced off crude delivered to Cushing, Oklahoma. The two typically move together but can diverge on regional supply factors.
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This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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