Crude Oil Prices Gain as Ceasefire Uncertainty Keeps Supply Risks in Focus

Crude oil prices rallied on Wednesday as tensions continued between the US and Iran. Brent Oil (BCO) surged to $102 while WTI Oil (CL) surged to $90.60. This positive action in price highlights market’s responsiveness to news. Positive news quickly leads to selling and negotiations lead to buying. Market participants are responding quickly to news from both camps.

The war has posed a significant supply threat particularly at the Strait of Hormuz. The partial blockade of the Strait of Hormuz has constricted supply. This has caused prices to rise and market uncertainty. Gulf oil importers are seeking alternative sources.

The effect is already being felt around the world. Emergency measures have been taken in Asia as supply is threatened. Moreover, the Europe could also be short of oil. If this conflict drags on, the oil prices may continue to rise further to $150 and $200 as the next significant barriers. This surge in energy prices may result in global recession.

Hope for a deal is preventing prices from rising. Stocks are up as a deal is expected. The US decision to lift sanctions on Iran also increases the oil supply. At the same time, US crude inventories increased by 6.9 million barrels to 456.2 million barrels which is far above expectations for a 0.5 million barrel. This marks the fifth consecutive weekly build. This makes for uncertainty between pessimism and optimism in the short run.

WTI Oil Technical Analysis – Bullish Structure Intact as Support Strengthens

The daily chart for WTI crude oil shows that the price broke the key level of $68 when the US and Israel struck Iran for the first time in February 2026. The initiation of the US-Iran war was triggered by a significant breakout from the bullish pattern that had been formed since May 2024.

This breakout initiated a surge in WTI crude oil towards the resistance level of $119. After hitting this level, prices corrected lower towards the significant support area of around $80 to $85. Since the RSI indicator has shown overbought conditions, the market is correcting normally to stabilize in the short term.

The short term price action for WTI crude oil remains strongly bullish. It is observed that when the war started, there was a big gap in the oil market, which pushed oil prices to the $120 area.

After this strong surge, oil prices corrected back to mark support around $75 and then marked a U-turn again. Oil prices have been constructing a strong bullish pattern, as the recent drop in WTI crude oil marked strong support at $87.

The prices are again rebounding towards the $100 region. The strong uncertainty in the Middle East indicates that oil prices will likely remain high in the short term.

Brent Oil Technical Analysis – Bullish Trend Resumes After Healthy Correction

Brent crude oil also shows strong bullish price action, as seen on the chart below. Prices broke above the $80 region at the 200 SMA on the weekly chart and then surged higher towards the $120 area.

However, a recent correction back towards the $100 level has found strong support, and price is now again moving higher towards the minimum target of the $125 to $135 region. A break above this region will open the door for a strong surge towards the $200 area. From a technical perspective, the recent correction in Brent Oil is due to the extremely overbought conditions as seen in the RSI. However, this correction will likely bring more buyers, which could take oil prices towards the $125 to $130 region.

Bottom Line

Geopolitical tensions and tight supply continue to support oil prices. The tensions in the Strait of Hormuz continue to put floor under the market. Meanwhile, expectations of deal and increased supply from sanctions removals are limiting upside. This indicates a choppy short-term outlook.

From technical perspective, both WTI and Brent remain in strong bullish trends despite recent retracements. Support levels remain strong with buyers entering the market. Continued tensions could see prices extend to $125 and beyond, with extreme scenarios of $150-$200. But any de-escalation in conflict could rapidly bring prices down and lead to temporary corrections.

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