Oil News: Crude Oil Futures Jump as War Threatens OPEC Production Flows

WTI Tops $86 and Brent Breaks $89 as Traders Price In a Prolonged War

Crude oil prices are soaring on Friday with nearby West Texas Intermediate topping $86.00, its highest level since April 2024 and international benchmark nearby futures contract Brent breaking out above $89.00 a barrel. While no particular event is behind the strength today, the price action suggests trader assessment of the impact of the U.S.-Iran war is strongly leaning toward the “prolonged” side, indicating they expect more than just a two-week war.

Prices did dip a little overnight, but that now looks like buyers were taking a breather while gathering strength for the current surge, shortly before the U.S. futures market opening. Today’s spike in prices comes as bullish traders now see the conflict spreading across the Middle East to other oil-producing countries. Oil production is currently being disrupted in other OPEC countries, bringing traffic in the key Strait of Hormuz to a near standstill.

Qatar’s Energy Minister Says $150 Oil Within Weeks If Tankers Can’t Get Through

We haven’t hit the $100 level yet, but some traders may be looking beyond that already after the Financial Times reported that Qatar’s energy minister said the war could see Gulf energy exporters stop all shipments in the region within days. According to Saad al-Kaabi, crude oil prices could reach $150 a barrel within weeks if tankers can’t get through the Strait.

U.S. Scrambling for Back-Up Plans as Iran’s Response Catches Officials Off Guard

While some U.S. officials continue to talk up ways they are considering to dampen excess speculation in the futures market, others appear to be suggesting the fighting is likely to intensify. Both moves indicate the U.S. may not have been prepared for Iran’s response to the initial bombing on Saturday and that back-up plans have to be improvised to stop oil prices from accelerating to triple-digits and staying there for a prolonged period of time.

Some measures the U.S. is taking to calm the market’s rapid price rise include issuing a 30-day waiver to India to resume purchases of Russian oil. Also an unnamed White House official told Reuters that the U.S. Treasury may intervene in the oil futures market to curb energy price spikes.

Is the Market Pricing in Now or What Comes After the War?

One thing that analysts are trying to figure out today is whether the market is trying to price in the current situation that calls for limited or nearly no supply of oil from the Gulf, or are they trying to factor in what lies ahead for Iran after the war ends.

$84.52 Cleared — $87.63 Is the Trigger for a Run at $95.00 and $100.00

Technically, the rally is a pretty simple pattern of strong momentum overcoming previous tops. Just a short while ago, crude crossed to the strong side of former resistance at $84.52 and is now poised to challenge $87.63. This is today’s potential trigger point that could trigger an acceleration into a major target at $95.00 and this level is the gateway to $100.00.

More Information in our Economic Calendar.