The rally followed US and Israeli airstrikes on Iran and Tehran’s retaliatory missile and drone strikes across the region, including Lebanon, Saudi Arabia, Qatar and Dubai.
The violence has disrupted regional energy flows and raised fears about the Strait of Hormuz, through which about 20% of the world’s oil flows. Any prolonged disruption to this peak could significantly tighten global supply and raise oil costs.
European natural gas prices also jumped nearly 40% after Qatar’s state-run energy company said it would halt production of liquefied natural gas, raising concerns about broader energy market volatility.
US President Donald Trump said the military campaign, which began with an attack on Tuesday that killed Iran’s Supreme Leader Ayatollah Ali Khamenei, was progressing “significantly” ahead of schedule but could last up to four weeks. He said that his goals include destroying Iran’s missile system, naval and nuclear programs and stopping support for armed groups in the region, but he did not call for regime change.
The US State Department has asked Americans to leave the Middle East to the east of Egypt. Meanwhile, a general in Iran’s Revolutionary Guard has threatened to “burn any ship” in the Strait of Hormuz, saying Iran will attack oil pipelines and cut off oil exports from the region. He warned that the price of oil will reach 200 dollars in the coming days.
A sharp rise in crude oil prices has raised concerns about inflation globally. Higher energy costs could complicate the central bank’s efforts to reduce inflation while considering cutting interest rates to support growth. In an earlier note, the broker highlighted a breakout above $66 as a trigger for further gains. “A breakout above $66 quickly emerged, with prices rising to $70 and after the US-Israeli attack on Iran injected a sharp geopolitical risk premium into energy markets,” Samko said.
Crude oil has now reached a key resistance level near $77.65, which had capped prices in the previous session, the brokerage added. It warned that geopolitical events often lead to rapid price movements that then stabilize when the immediate news is absorbed by the markets.
“With crude reacting strongly to the pre-conflict narrative, the likelihood of consolidation or cooling has increased,” Samko said, advising traders to avoid following the current rally and wait for a return to previous breakout levels for better risk-reward opportunities.
Also Read | NFO Insights: Will TRUSTMF’s Mid-Cap Fund GARV and LIM Strategy Help Identify Quality Mid-Cap Opportunities?
((rejection: The recommendations, suggestions, opinions and views given by the experts are their own. (It does not represent the views of The Economic Times.)
Oil Price Today News
