WTI Crude Rallies as US-Iran Flare-Up Lifts Supply Risk

Key Moments

WTI Extends Winning Streak on Geopolitical Jitters

West Texas Intermediate (WTI), the benchmark US crude oil contract, continues to attract steady buying interest, advancing for a third straight session and rising in five of the past six trading days. During Asian hours on Wednesday, prices pushed to a new high since July 24, with the contract changing hands in the mid-$90.00s, up 1.20% on the session. The ongoing move higher reflects persistent support from mounting US-Iran tensions, which are reinforcing the current weekly uptrend in crude.

Middle East Escalation Heightens Supply Disruption Risks

The latest developments in the broader Middle East crisis have sharpened market focus on energy supply risks. US forces carried out strikes on Islamic Revolutionary Guard Corps targets, responding to attempted attacks on commercial vessels in the Strait of Hormuz and on US service members in the region. In parallel, Iran stated that it launched heavy ballistic missile and drone strikes against US-linked locations in Jordan and the UAE.

These actions emphasize ongoing threats to commercial shipping through critical chokepoints and amplify worries about potential disruptions in crude flows, providing a firm floor under oil prices.

Strategist View: Fragile Energy Corridors and Persistent Risk Premium

Strategists at TD Securities characterize the latest US-Iran flare-up as a clear warning about the durability of current arrangements around key trade routes. According to them, the escalation is a reminder that
“the latest escalation in the conflict between the US and Iran continues to highlight how flimsy any deal or MoU headlines really are.”
They highlight that the renewed confrontation underscores how fragile agreements around major energy chokepoints remain, even as cargoes are increasingly diverted through US-backed corridors, preserving a visible risk premium across energy markets.

Additional Supply Signals: Russia and Venezuela in Focus

Beyond the Middle East, recent policy moves from major producers are also shaping the outlook. Russia’s decision over the weekend to prolong its diesel export ban until September 30 has intensified concerns about refined product availability, supporting crude prices as markets reassess downstream supply.

At the same time, US President Donald Trump indicated on Sunday that crude secured via a newly announced agreement with Venezuela would be directed toward refilling the Strategic Petroleum Reserve. However, the timing and speed at which this Venezuelan crude could translate into effective incremental supply remains uncertain, reinforcing the constructive bias for oil prices.

Technical Landscape: Bulls Maintain Control Above Key Supports

From a technical perspective, WTI US Oil retains a bullish configuration as long as it trades above the 100-day Simple Moving Average (SMA) at $85.12 and the 50.0% Fibonacci retracement at $87.20. Regaining and holding these levels suggests that pullbacks are likely to attract dip-buying interest, although the upside is currently constrained below the 61.8% Fibonacci retracement at $91.88.

Beyond $91.88, the 78.6% retracement at $98.55 is the next notable resistance zone, with the previous swing high near $107.04 representing a more distant hurdle for bullish momentum. On the downside, initial support is seen around the 50.0% retracement at $87.20, followed by the 100-day SMA at $85.12. Should selling pressure intensify, further retracements could expose the 38.2% Fibonacci level at $82.51, and subsequently the lower Fibonacci support areas at $76.72 and $67.36.