US-Iran Conflict Escalation Spurs WTI Price Bounce
The US Central Command has carried out its 13th consecutive night of strikes on Iran, targeting drone facilities and coastal surveillance sites. The Iranian state media reported explosions along the Strait of Hormuz in Qeshm and Bandar Abbas.
Fears of oil supply disruption could boost the WTI price in the near term. Yemen's Iran-backed Houthi rebels attacked oil tankers in the Red Sea, threatening a key export route that Saudi Arabia has used to bypass the Strait of Hormuz.
US President Donald Trump said that the US would hold Iran responsible for the Houthis' actions and warned that Iran and its Houthi allies would both soon receive a 'major military punishment'. Despite the recent pullback from highs, WTI US Oil holds above the 100-day simple moving average (SMA) and comfortably over the Bollinger middle band.
Rabobank's energy strategists observe that mounting geopolitical risks have been a key driver of the latest move higher across the energy complex. They highlight that 'the escalation between the U.S. and Iran following the collapse of the interim peace deal, as well as intensifying strikes between Ukraine and Russia, drove price rallies across crude oil, refined products, natural gas, and European power markets over the past week'.