Oil News: Crude Oil Outlook Bullish as Strait of Hormuz Risks Gain Focus

Oil Prices Surge After Israel-Iran Escalation Rattles Middle East Supply Outlook

Crude Oil News Today – Oil futures surged more than 7% Friday following Israel’s large-scale strikes on Iranian nuclear and military sites, marking the most intense price rally since the Russia-Ukraine conflict in 2022. However, prices pulled back after testing key resistance levels, leaving traders to weigh whether the spike marks the start of a sustained move or a short-term reaction.

At 10:01 GMT, Light Crude Oil Futures are trading $72.99, up $4.95 or +7.28% and Brent is at $74.24, up $4.68 or +6.73%.

WTI and Brent Rally but Face Technical Headwinds

West Texas Intermediate (WTI) crude futures jumped as high as $77.62 before retreating, closing well off session highs but still up 7.5% on the day. Brent reached $78.50 intraday before settling near $74.46, its highest since January.

These were the largest single-day gains for both contracts in over two years. WTI now faces stiff resistance near $78.09 and $80.47, while support lies at $71.17 and deeper at $68.21 and the 200-day moving average near $66.45.

Israel Targets Iran’s Strategic Sites, Market Eyes Strait of Hormuz

The price surge followed Israeli strikes on Iranian nuclear and military infrastructure, including the Natanz facility. Though Iran confirmed damage to the site, no radioactive contamination was reported. The market’s immediate concern is whether this conflict could affect the Strait of Hormuz, through which nearly 20% of global oil flows—approximately 18 to 19 million barrels per day.

While no disruption to oil flows has been reported so far, the geopolitical premium has been rapidly priced in. SEB’s Ole Hvalbye noted that despite the volatility, physical oil movements remain unaffected. JPMorgan analysts warned that a worst-case scenario involving a Hormuz closure could see prices spike to $120–$130 per barrel, significantly above their base case.

OPEC+ Spare Capacity May Buffer Supply Shocks

Barclays noted that the recent $10 surge in prices hasn’t yet reflected any actual drop in Iranian output. Rystad Energy’s Janiv Shah emphasized that with most Iranian exports headed to China, those flows are most vulnerable.

However, he pointed out that OPEC+ retains spare capacity, potentially serving as a backstop against further disruptions. RBC Capital’s Helima Croft underscored that the market is now watching whether Iran’s retaliation remains regional or targets broader infrastructure.

Oil Prices Forecast: Near-Term Bullish, Watch for Event Risk

The immediate outlook for oil prices remains bullish given the geopolitical risk premium. However, without concrete supply disruptions, gains may be capped by strong technical resistance and potential for de-escalation. Traders should expect two-sided volatility, but geopolitical risks currently favor a bullish bias.

More Information in our Economic Calendar.