How pros are trading the oil surge
Rising tensions in war-torn Syria have stirred concerns over oil supply security in the Middle East, sending oil prices sharply higher over the past few days, including 6 and 7 percent gains in Brent and U.S. crude prices, respectively.
To some professional traders in the United States, though, the threat of Western countries entering the Syrian conflict is of grave concern. Syria doesn't export much oil, but the Middle East provides one-third of the world's oil, so a military conflict could curb production.
"There are pipelines that do go through Syria. They're in the heart of the Middle East and that's where most of the world's crude comes from, so traders have a fear that this [conflict] is going to spread outside," said Anthony Grisanti, a commodities trader and founder of GRZ Energy from the floor of the New York Stock Exchange.
Though the fighting between the Syrian rebels and President Bashar Assad's regime has been going on for two years, Grisanti noted the situation is highly fluid, making the oil trade highly volatile.
(Read more: Oil prices rising but shock is not yet in the cards)
"If this [conflict] starts spreading, then watch out for crude oil. If it doesn't spread and we have missile strikes, this could be the mother of all sales," he said on CNBC's "Fast Money Halftime Report."
U.S. crude oil futures are flirting with a 2½-year high, heading for the biggest weekly percentage gain in close to two months. Brent prices have surged to a six-month high.
To pro trader Rich Ilczyszyn, founder of iiTrader, crude oil could surge to $116 a barrel should the Syrian conflict continue to worsen. Technical indicators suggest that so long as oil is able to close above $109 a barrel, it will continue to push higher, Ilczyszyn said.
If oil stays above the $110 level, however, the U.S. might consider tapping into its emergency fuel storage of oil, known as the Strategic Petroleum Reserve, which Ilczyszyn warned would "potentially put the lid on the market."
(Read more: Investors: Be cautious as Syria looms)
So what's the trade? Here's a look at the oil stocks the "Fast Money" traders are currently interested in.
Exxon Mobil's stock is "way oversold," said Dan Nathan, co-founder of RiskReversal.com. He plans to play the stock through a long call butterfly in September, which is basically a neutral option strategy that combines both bull and bear spreads.