West Texas Intermediate crude oil is trading around $90.50 per barrel during Monday’s Asian session after opening with a bullish gap, holding gains despite pulling back slightly from the opening spike. The surge follows reports that Iran has launched missiles toward Israel, escalating Middle Eastern tensions that threaten regional oil infrastructure and supply routes.
The geopolitical flare-up has triggered immediate safe-haven flows into energy markets as traders price in potential supply disruptions from the world’s most critical oil-producing region. WTI’s ability to maintain elevated levels above $90 signals sustained concern over the conflict’s potential to expand and impact production facilities or key shipping lanes like the Strait of Hormuz.
Market participants are now monitoring for any retaliatory responses and assessing whether this represents a contained incident or the beginning of broader regional instability that could push crude prices significantly higher.
FXnCO Insight
Energy traders should prepare for elevated volatility and consider hedging strategies as geopolitical risk premiums are now firmly embedded in oil pricing, with further upside likely if hostilities escalate.
Source: FXStreet