Middle East Tensions Spark Oil Price Surge
The Middle East conflict has sent oil prices soaring, with WTI crude breaking into triple digits last week and surging more than 9%. The escalation of direct clashes and retaliatory tanker seizures between the US and Iran in the Persian Gulf has brought commercial shipping through the Strait of Hormuz to a near-halt, rendering the Trump administration's economic sanctions ineffective.
Yemen's Houthi rebels have made significant advances, seizing control of the gateway to the Red Sea and launching attacks on energy facilities across multiple Saudi cities. This has left another vital shipping lane in danger of being cut off. Additionally, Saudi Arabia has shut down a major oil pipeline following a drone attack from Iraq.
From a technical perspective, WTI crude oil futures have been locked in a range-bound battle between bulls and bears. However, the bears held a slight advantage until last week, when prices decisively broke above the F5 resistance level at $94. This opens the door to further upside for WTI.