Oil prices approach $100 as US-Iran tensions rise, with post-breach risk the bigger worry

Oil prices are once again approaching the $100 mark as the week progresses.

Brent crude has already moved above $99 during morning trading, getting very close to the psychologically important level. This comes as tensions between the United States and Iran keep escalating. West Texas Intermediate crude, meanwhile, is trading above $94, a level not seen since June.

This is not the first time prices have reached this point during the conflict. However, the current situation makes it harder to write off the increase as simply a geopolitical risk premium.

The technical picture

In June, oil prices fell back toward $70 after the US and Iran appeared close to reaching an agreement and proceeding with nuclear talks. That deal quickly collapsed, however, sparking a price rebound in July.

Considerable uncertainty prevailed between then and August, producing choppier price movements as traders remained unsure whether negotiations would resume. With President Trump now turning this into an economic confrontation, the conflict—and crucially, the closure of the Strait of Hormuz—looks set to drag on.

That has fueled a further price increase, particularly over the past two weeks.

From a technical standpoint, WTI crude appears to have room to rise from current levels toward $100. The July high around $93.50 was a notable resistance point, but once past that, there is little to stop buyers. The June high near $97.00 may present an obstacle, though it should not be given too much weight at this point.

The main barrier for buyers is the potential for headline risk. As a result, traders are being cautious and not rushing in as aggressively as they did in March.

Each passing day makes the danger of the conflict affecting a larger portion of global oil supply more tangible than it already is.

$100 oil itself isn't the number that markets should fear

As the March-to-May rally demonstrated, markets can absorb short-lived price shocks. The far more uncomfortable scenario is one where oil rises above $100 and remains there. The key concern is how that will eventually feed into higher inflation and become a bigger story for markets.

While the next major headline will be when Brent or WTI breaks $100, the more important issue is what happens afterward. That is where the real risk for markets lies. It is not simply how high oil goes, but how long it stays there.