The VIX has dropped below 16 for the first time since the Iran conflict escalated, settling around 15.5, down from a peak of 28 five months ago. Brent crude oil prices have retreated from nearly $118 per barrel in March, when fears of disruption to the Strait of Hormuz threatened roughly a fifth of global oil supply. The April truce announcement provided investors with a reason to buy the dip, triggering a sustained decline in both oil prices and the VIX. Despite the apparent calm, geopolitical tensions in the Middle East remain unresolved, and the current VIX at 15.5 leaves very little cushion to absorb any unexpected escalation.
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