What specific financial instrument did Diamondback Energy use to hedge against a potential U.S. crude oil export ban, and at what strike prices and volumes?

Diamondback Energy bought put options to sell the price spread between WTI and Brent crude at minus $41.67 per barrel for up to 255,000 barrels per day in Q2 2026, and at minus $42.76 per barrel for up to 290,000 barrels per day in Q3 2026, spending nearly $70 million on this hedge.

Why would a U.S. crude oil export ban cause the WTI-Brent price spread to widen, and how does Diamondback’s hedge profit from that scenario?

A U.S. export ban would flood the domestic market with surplus crude, pushing WTI prices down relative to global benchmarks like Brent—thus widening the WTI discount (i.e., making the spread more negative); Diamondback’s put options on the spread would pay off if the actual spread falls below the strike prices (e.g., if WTI trades $50 under Brent, the company gains ~$8.33 per barrel on the Q2 position).

Diamondback bets on wider WTI-Brent gap amid US export ban concerns

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Diamondback Energy purchased options to hedge against a widening WTI-Brent price spread, anticipating potential U.S. crude export bans driven by geopolitical tensions with Iran.

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