Iran strikes on US bases in Bahrain and Kuwait push WTI above $97 and Brent near $96.50. Traders price prolonged Hormuz closure; next catalyst is $97.50 break.
Iran launched strikes against U.S. naval and air bases in Bahrain and Kuwait in the latest session, pushing WTI crude oil above $97 and Brent crude toward $96.50. The attack also struck Kuwait's civilian airport, suspending flights and prompting Kuwait to expel two Iranian diplomats. Traders are now pricing a prolonged closure of the Strait of Hormuz that could last weeks or months, according to the source. The shift from a short-lived disruption to a multi-month negotiating cycle has raised the geopolitical premium in oil structurally.
The source defines clear technical zones. WTI crude is testing resistance at $97.00 – $97.50. A daily close above $97.50 opens the path to $102.00 – $102.50, the next major supply area. On the downside, a break below $94.00 exposes support at $91.00 – $91.50.
Brent crude is testing the $96.00 – $96.50 resistance zone. A successful test pushes prices toward $101.00 – $101.50. The 50-day moving average sits at $103.20, which would become the next technical ceiling if momentum holds. The RSI remains in moderate territory, leaving room for additional upside if catalysts align.
| Instrument | Current Resistance | Next Target | Key Support |
|---|---|---|---|
| WTI crude | $97.00 – $97.50 | $102.00 – $102.50 | $91.00 – $91.50 |
| Brent crude | $96.00 – $96.50 | $101.00 – $101.50 | $91.00 (inferred) |
The simple read says oil is rallying because of a military escalation. The better market read says the rally is about a structural shift in supply risk. The Strait of Hormuz is a chokepoint for about 20% of global oil transit. When traders expect it to stay closed for weeks or months, the baseline assumption for supply changes. The source notes that neither Israel nor Hezbollah appear ready for a comprehensive deal, and Iran believes the Israel-Hezbollah conflict should be included in any U.S. deal. That complicates the timeline.
Natural gas gained ground as traders took profits off the table after a recent pullback and refocused on Middle East tensions. The source reports that natural gas is trying to settle back above the $3.20 – $3.25 resistance level. Success would send prices toward recent highs near $3.40, then the $3.50 – $3.55 zone. Support sits at $3.15, with the next floor at $3.00 – $3.05.
The transmission path for natural gas is different from crude. Natural gas is less directly exposed to Strait of Hormuz flows, since most LNG trade uses different routes. The move here is more about a broad risk premium lifting all energy contracts in the short term. That premium could fade quickly if the headlines calm.
The oil rally is feeding into a standard macro adjustment. Higher crude prices raise inflation expectations, pushing nominal yields higher as the market demands a greater term premium. The U.S. 10-year yield is sensitive to this dynamic. A move higher in yields strengthens the dollar by widening rate differentials against currencies of oil-importing economies.
For currency traders, the immediate impact is a stronger U.S. dollar against currencies of nations that rely on imported crude. The Japanese yen faces additional pressure: higher oil prices worsen Japan’s trade balance and push domestic yields up more slowly than U.S. yields. EUR/USD may decline as the European Central Bank confronts a stagflationary mix of higher energy costs and weaker growth. For a broader view, see our forex market analysis and the EUR/USD profile.
Risk to watch: If the dollar rally becomes self-reinforcing, it could suppress the commodity complex including oil itself. That is a secondary risk for now, not the dominant driver.
Higher oil prices act as a tax on consumption and raise input costs for many industries. Equity indices weighted toward consumer discretionary and manufacturing tend to underperform in such environments. The Nasdaq Index fell in the same session as oil climbed, reflecting the rotation out of growth stocks as discount rates rise.
The near-term price action depends on whether the ceasefire framework between the U.S. and Iran can be sustained. President Trump confirmed that he put pressure on Israeli Prime Minister Netanyahu to stop fighting in Lebanon, the source reports. Neither side appears ready for a comprehensive deal. Kuwait expelled two Iranian diplomats after the strike, signaling a diplomatic escalation.
The next scheduled data release that could move oil markets is the weekly EIA inventory report. A larger-than-expected draw would confirm the supply squeeze from the Hormuz disruption. Traders should also monitor any statements from OPEC+ about potential output adjustments.
Bottom line for traders: The near-term bias remains bullish for crude until credible diplomatic progress emerges. The market has repriced from a short-lived event to a multi-month risk. Size positions for headline-driven reversals using the position size calculator and pivot point calculator. The currency strength meter can help identify relative momentum across energy-currency pairs.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.