Oil Markets Rattled by Iran Risk

Added: 2026-05-18

[00:00:00][music] >> Oil prices are rising sharply on Monday after President Trump described Iran's response to the latest US peace proposal as unacceptable, undermining hopes of a breakthrough in negotiations.

[00:00:17]Now, WTI jumped 4% at one point above $100 a barrel before easing back to around $97 at the time of recording, still up 2% on the day. Now, crude oil had fallen around 6% last week on optimism that this 10-week conflict between the US and the Iran could move towards a resolution and allow shipping through that key Strait of Hormuz.

[00:00:43]However, the latest developments highlight how fragile those expectations remain. Now, oil markets continue to trade heavily on geopolitical headlines with the prices reacting to comments from both Washington and Tehran. Now, attention is going to be turning towards Trump's upcoming with Chinese President Xi Jinping in Beijing later this week when discussions are expected to include the disruption of global energy flows. Markets will be watching closely for any signs that China could use its influence over Tehran to help some de-escalation and support the reopening of the Strait of Hormuz. According to Saudi Aramco CEO, the global market has effectively lost over 1 billion barrels of oil supply over the past 2 months. So, what that means is that energy markets are very tight and even if flows do begin to normalize soon, it will take quite some time for those markets to return to any sense of normality. Now, technically oil continues to trade above the 50 SMA and the 38.2% fib retracement of the 55 low and the 120 high, reinforcing a bullish bias. Buyers Buyers are going to look to ride above the $100 a barrel and the 105 level, which is the 23.6 fib retracement to retest that sort of 110 111 recent high. A rise above there creates a higher high and brings that 120 2026 high back into focus. On the downside, sellers who could be encouraged by this slowing momentum with the RSI around 50 would need to see a settle below that 50 SMA and the 95 level in order to create a more neutral structure. A break below 8860, the May low, creates a lower low as well as 88, which is the 50% fib retracement, and that would create a more bearish structure bringing $80 back into focus.

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