Crude Volatility Soars on Iran Strikes
US/Israel Attack Iran
Oil prices are seeing significant volatility at the start of the week following news over the weekend of the US and Israel attacking Iran. Joint missile strikes on Iran led to the killing of the Iranian Supreme Leader, provoking retaliatory attacks from Iran against Western assets across the Middle East. With Iran threatening further retaliation and Israel expanding its attacks, Trump has warned that the joint mission against Iran could run on for weeks.
Heavy Supply Risks
Against this backdrop, crude prices look poised for further upside near-term as traders navigate heavy supply risks. As well as the threat to energy infrastructure in Iran and the wider region, traders are watching the Strait of Hormuz, with is used as a distribution channel for around 20% of sea-borne oil. The Strait remains open for now but if blocked or closed by Iran, this could fuel a fresh spike higher in crude prices near-term.
Volatility to Continue
While crude prices have softened from the initial highs seen as the market gapped open this week, upside risks remain well entrenched here. The risk of a fresh escalation in the conflict means that crude prices remain vulnerable to sharp moves higher in response to any incoming headlines reflecting any intensification of violence. With that in mind, crude could easily be trading around $100 p/b in coming weeks unless Iran surrenders or the US and Israel announced an end to their military operations.
Technical Views
Crude
The spike higher in crude prices saw the market testing the bearish trend line from 2025 highs which is holding as resistance for now. While price remains above the $70.48 level, focus is on a fresh push higher and a move up towards the $78.42 level next ahead of the 2025 highs atop the $80 mark.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.