Geopolitical tensions in key shipping lanes drive crude prices higher amid fears of prolonged supply constraints.
Crude oil prices extended gains as disruptions in the Strait of Hormuz and Red Sea worsened supply risks. The Strait of Hormuz remains effectively closed due to US-Iran hostilities, while Houthi forces imposed a naval blockade on Saudi Arabia in the Red Sea on Monday.
Prior to the escalation, oil had stabilized near multi-month highs, with traders pricing in potential supply shocks. Diplomatic efforts to broker a ceasefire between Tehran and Washington continue, but no breakthrough has been reported. Analysts note that any de-escalation could reverse the upward trend.
Technical resistance at $88 per barrel capped recent gains, with sellers targeting a pullback toward $78. A break above $88 could open the door for a rally to $96, according to chart analysis.