WTI crude surged at the start of the week as geopolitical tensions flared after US airstrikes hit Iranian nuclear targets over the weekend. The move marks a dramatic escalation in the long-simmering conflict between Iran and Israel, now drawing in direct US involvement. Investors are now awaiting Tehran’s next move after Iranian officials said “all options” remain on the table in response.
Attention is now centered on the Strait of Hormuz, a strategic waterway through which one-fifth of the world’s oil flows. Iranian lawmakers have approved a non-binding motion to shut down the strait, though the final decision lies with the National Security Council. Any disruption to shipments through Hormuz would have a profound impact on global supply chains and energy prices.
Technically, WTI crude’s surge from the 55.20 low is now approaching a key resistance at 81.01. Barring a broader escalation, the rally could stall here, especially with overbought momentum indicators flashing caution. A break below 73.69 would be an early sign of stabilization and may trigger profit-taking correction.
But if the conflict deepens and prices break decisively above 81.01, the rally could accelerate toward through 38.2% retracement of 131.82 (2022 high) to 55.20 at 84.46. Sustained break above 84.46 would mark a significant reversal of the long-term downtrend from the 2022 high and open the path to 95.50 or even to 61.8% retracement at 102.55.
With tensions high and the market highly headline-sensitive, holding below 80 will be key to preventing a return to 100+ oil—and renewed inflationary concerns worldwide.
