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Middle East Conflict Ignites Oil Prices, Targeting $80!
Commodity
Summary:
The recent intensification of the conflict between Israel and Iran has propelled oil prices upward. Iran has even hinted at the possibility of closing the Strait of Hormuz, which has further exacerbated market fears of supply chain disruptions.
Buy
CLOSEDWTI
End Time
70.934
Entry Price
77.900
TP
68.400
SL
71.303 +1.318 +1.88%
2534
Points
Loss
68.400
SL
68.392
CLOSING
70.934
Entry Price
77.900
TP
Fundamentals
The recent Israeli airstrikes on Iranian nuclear facilities and military targets have directly triggered a surge in safe-haven buying in the crude oil market, driving up prices significantly. The severity of this conflict far exceeds previous incidents—the casualties among Iran’s Revolutionary Guard Corps and nuclear scientists, as well as the shutdown of production platforms at the South Pars gas field following Israeli strikes, have all intensified market concerns over potential disruptions to the Middle East’s crude oil supply chain.
Meanwhile, Iranian officials have indicated that they are seriously considering closing the Strait of Hormuz. As a crucial conduit for global crude oil transportation, approximately one-third of the world’s seaborne crude oil trade passes through the Strait. JPMorgan and other institutions have priced the risk of a closure as a potential oil price shock to $120-$130 per barrel. Although the market currently assesses the probability of a complete closure at only 7%, safe-haven funds have been pouring into crude oil and other commodity markets to hedge against the risk of future supply disruptions.
Additionally, the U.S. and European Strategic Petroleum Reserves (SPR) have been continuously released over the past few months, but the scale of releases has significantly diminished, and expectations for restocking or partial replenishment are beginning to emerge. Reports from Morgan Stanley and other investment banks suggest that if the Middle East conflict escalates further and affects maritime transportation, global inventories would need to allocate an additional 1 million barrels per day to cover the supply gap. This supply deficit is expected to push up oil prices in the short term. On the demand side, China’s “Warm Europe” policy and India’s early entry into the monsoon season, which increases transportation fuel demand, are also providing strong support.
Overall, concerns over supply chain security and the seasonal upturn in demand are giving crude oil bulls a clear advantage at this critical juncture.
Technical Analysis
From the daily chart, WTI crude oil surged by over 10% on June 13 (reaching a high of $74.68), breaking through the key psychological level of $70.00 and the previous resistance at $71.97. This has opened up further upside potential, with the next target likely to test the resistance at $79.35.
In terms of moving averages, the MA20 has crossed above the MA60 to form a bullish golden cross, indicating strong upward momentum and increasing the likelihood of further gains.
Traders are advised to adapt a strategy of buying on dips.
Trading Recommendations
Trading Direction: Long
Entry Price: 70.50
Target Price: 77.90
Stop Loss: 68.40
Valid Until: June 30, 2025, 23:00:00
Support: 69.42/67.77
Resistance: 73.44/74.68
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