Energy traders are increasingly cautious about longer-term positions as the wars in Iran and Ukraine cloud the outlook beyond the next few months. Brendan Ross, Morgan Stanley's co-head of global oil trading, noted market participants are concentrating derivatives positions over shorter time horizons and becoming more clinical about risks. They are now more selective, shifting from broad derivatives exposure toward specific instruments as geopolitical risks mount.

This shift reflects a broader trend of war-weariness among traders who are wary of extended exposure to volatile Middle Eastern and Eastern European markets. The cautious stance suggests reduced risk-taking in futures and options markets as uncertainty persists. Traders are favoring shorter-dated contracts to navigate the current instability, prioritizing immediate price movements over strategic long-term plays.

This adjustment highlights how ongoing conflicts are reshaping trading strategies and risk management approaches in the global oil sector.