Crude oil prices continued their sharp rise on Tuesday, with West Texas Intermediate (WTI) futures up roughly 15% since Friday’s close. The move was driven by heightened fears of supply disruptions after U.S. and Israeli strikes on Iran, which market participants say have raised the prospect of interrupted flows from the Gulf region.
Tensions have intensified most notably around the Strait of Hormuz following a weekend strike that killed Iran’s Supreme Leader Ayatollah Ali Khamenei and much of the country’s military leadership. Iranian authorities have warned of a possible full closure of the narrow but vital waterway - a route that handles approximately one-fifth of global seaborne oil trade.
Beyond threats to close the strait, Iranian officials have signaled they could target vessels attempting to transit the channel. That stance increases the potential for crude export disruptions from major Gulf producers including Saudi Arabia, Iraq and the United Arab Emirates, and it has added to market risk premia.
Analysts at ING highlighted concerns that the greater danger for markets may extend beyond the strait itself. "While there are concerns about oil flows through the Strait of Hormuz, a greater risk to the market would be Iran targeting additional energy infrastructure in the region. This could lead to more prolonged outages," the bank said.
Technical picture
From a technical perspective, crude prices are trading at their highest level since June of last year and appear to be attempting a breakout above a downward channel that has contained prices since 2024. Market watchers say a daily close above $72.50 would confirm that breakout and pave the way for additional upside.
The first technical target identified sits at $75.66, which corresponds to the 200-week moving average. Should momentum continue, attention would shift to horizontal resistance at $76.90 - a level that has acted as an important support and resistance pivot in the past. A further near-term bullish objective is placed at $83.50, representing the 38.2% Fibonacci retracement of the move from the 2022 high to the 2025 low.
On the downside, the previously broken 200-month moving average at $71.55 is expected to serve as initial support on any meaningful pullback.
Market implications
- Oil prices are reflecting a material risk premium tied to geopolitical developments in the Gulf.
- Shipping routes, Gulf crude exporters and downstream refiners remain sensitive to disruptions in seaborne trade.
- Technical levels provide a short-term framework for traders assessing potential continuation or pullback scenarios.
Given current conditions, market participants are watching both geopolitical signals and price action at the technical levels outlined above for guidance on near-term direction.