Today oil traded near a five-month high. Brent is already above $110/bl — near its highest level since May — and WTI has risen past $100 to about $104. Brent is up roughly 80% year-to-date as widening conflicts in the Middle East and the Russia–Ukraine war have disrupted energy supplies. Refined products have jumped even more, notably European diesel futures.
Traders are now weighing the risk of fresh Iranian attacks in the Strait of Hormuz against evidence that Persian Gulf flows are recovering. Iran's first vice-president Mohammad-Reza Aref said on Monday the country "has no choice" but to establish control over the strait for its security. He added Iran could ensure safe passage for friendly countries but blamed the US for the current situation and said the US "must pay a price."
Despite recent tensions around the strait, exports from the Gulf have accelerated. US Energy Secretary Chris Wright said flows have recovered to roughly 80% of pre-war levels, although product shipments remain constrained. Iraq is among the producers ramping up exports — its oil minister said October shipments exceeded 3.4 million barrels per day and approached pre-war levels after deep discounts versus regional benchmarks.
At the same time, the Trump administration is permitting sales of sanctioned tankers so they can legally carry oil. Wright said the step is needed to expand shipping capacity because the US–Iran conflict is overloading flows and pushing up freight costs. Recall the proposed diesel-supply deal involving Russia remains controversial in the US, and US lawmakers have pushed back.
New attacks on tankers and energy infrastructure keep geopolitical risk elevated even as Gulf flows recover. Many analysts agree the balance of risk for oil prices is clearly to the upside: renewed assaults on shipping increase the chance of another supply disruption and further price gains.
All told, oil remains caught between two forces. On one side, restoring Gulf flows and rising Iraqi exports prevent the market from confidently breaking to new highs; on the other, Tehran's comments about controlling Hormuz and attacks on vessels prevent prices from plunging. I lean toward Brent holding near $110 in coming days, while any fresh flare-up in the strait could push it to a new May high.
As for the current technical picture, buyers need to clear the nearest resistance at $105. This will allow us to aim for $ 109, above which it will be quite difficult to break through. The furthest target will be the $113 area. If oil prices decline, bears will try to seize $101; if they succeed, a range break would damage bull positions and push oil down to $98, with the prospect of extending to $95.
