Implied volatility varies with time to expiry, and the shape of that variation is the volatility term structure. It usually slopes upward in calm markets and inverts in stressed ones, and the reason is the mean-reverting nature of volatility itself.
The logic is worth working through because it explains the shape rather than just describing it. If current volatility is low and volatility mean-reverts to a higher long-run level, then a long-dated option covers a period in which volatility is expected to rise, so its implied volatility should exceed the near-dated one. When current volatility is very high, the same reasoning runs backwards: the market expects the storm to pass, so near-dated implied volatility exceeds long-dated. An inverted vol term structure is therefore a statement that the current disturbance is expected to be temporary.
There is a specific interaction with the forward curve that has no equivalent in equities. Each crude expiry references a different underlying contract, and those contracts have their own spread dynamics. So a crude vol term structure is not purely about time horizon; it is partly about which delivery month each option is on, and the near contracts are genuinely more volatile than deferred ones because they carry the prompt physical constraint.
The vol cone is the tool for answering whether a current level is unusual. For each horizon, plot the historical distribution of realised volatility at that horizon, then mark today's value on it. The result shows immediately whether 30 percent at 30 days is a high reading or an ordinary one for this market, which is a question no single number can answer.
Placing implied volatility on the same cone is where it becomes a desk tool: it shows what the market is charging against what the market has historically delivered at that horizon, which is the variance risk premium made visible rather than asserted.