Crude Oil Price in Focus as Saudi Arabia-Houthi, US-Iran, Ukraine-Russia Tensions Escalate

Benzinga · 1d ago

Crude oil prices will be in the spotlight when markets open on Monday, as geopolitical tensions rise in key flashpoints and traders react to the latest decision by G7 countries to release millions of barrels from their strategic reserves. Brent, the global benchmark, rose to $102.60, up 14% from its September low.

US-Iran, Saudi Arabia-Houthi, and Ukraine-Russia Wars

Crude oil prices will remain in focus as tensions continue to build in key regions. Saudi Arabian and Yemeni government forces launched a major counteroffensive against the Houthis on Sunday, aiming to win back territory the group seized a few weeks ago. 

Most crucially, they hope to retake the Bab al-Mandeb Strait, a key artery for Saudi oil exports. Separately, the Houthis launched a strike on a Saudi Aramco refinery inside Saudi Arabia. The group has more targets that it can hit, including the East-West pipeline that reopened last week.

Meanwhile, Ukraine is seeking to escalate its war with Russia. In a statement, Ukraine’s Volodymyr Zelenskiy said that his military will double down on attacking Russian oil refineries in response to a new policy of airstrikes by Moscow that is designed to force people to abandon Kyiv and other cities. 

Attacks on critical energy infrastructure will have an impact on the energy sector because repairing it takes time. 

The war between the US and Iran is also expected to escalate, with the Trump administration sending another warship near Iran. Analysts believe Iran may seek to escalate to lift oil prices ahead of the US midterm elections. It could do so by attacking key US targets in the region, including aircraft carriers. Iran has also continued to strike ships crossing the Strait of Hormuz.

These events will likely lower the impact of the G7 decision to release 100 million barrels of oil from the Strategic Petroleum Reserves. 

Crude Oil Price Technical Analysis

crude oil price

WTI oil price chart | Source: TradingView

The daily chart shows that the WTI crude oil price bottomed at $67.17 on July 2nd and then rebounded to $91.25. It has remained above the ascending trendline that links the lowest swings since July this year. 

The price has also remained stable above the 50-day Exponential Moving Average (EMA) and the Ichimoku cloud indicator. Therefore, the price will likely rebound as tensions between the US and Iran, Saudi Arabia and Houthi, and Ukraine and Russia escalate. 

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