Strait of Hormuz Tensions Push Oil Higher After US-Iran Strikes

FUNDAMENTAL OVERVIEW

Crude oil extended gains on Friday, following reports of Iran’s ballistic missile launches. Iranian military forces recently announced a shift from defensive tactics to pre-emptive strikes on US military assets throughout the Middle East.

Oil prices remain underpinned by a higher risk premium, as the escalating exchange of strikes between the US and Iran in the Strait of Hormuz has stoked concerns about extended supply outages.

Separately, OPEC+ held its October production levels steady over the weekend, with Strait of Hormuz disruptions limiting the group's impact on physical supply and pricing. The oil market is now entirely driven by developments in the US-Iran conflict.

The central uncertainty is whether this represents another short-term escalation or an extended conflict. Trump stated that the current military operation against Iran would not last "too long", suggesting a wait for de-escalation signals before positioning for price declines.

Should the situation deteriorate, WTI crude could break above the July peak and target the $100 level once more.

CRUDE OIL TECHNICAL ANALYSIS – DAILY TIMEFRAME

Crude oil is consolidating near the July high around the 93.50 level. Sellers are active there, with a defined risk above resistance, positioning for a decline toward the major upward trendline. Buyers are awaiting a breakout above to push the rally toward the 97.00 level.

CRUDE OIL TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

A minor support zone near 89.00 defines the 89.00-93.50 range. Traders are expected to continue buying at support and selling at resistance until a breakout occurs.

CRUDE OIL TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

From a risk management perspective, buyers have a better risk-reward setup near the 89.00 support or the major trendline, while sellers are likely to accumulate around the 93.50 resistance or await a break below 89.00 support.

UPCOMING CATALYSTS

Thursday brings the US PPI report and Jobless Claims. The week ends with the US CPI report on Friday. The market's attention stays on the US-Iran strikes.