Fundamental Overview

Crude oil gapped higher today after the United States struck Iran's Larak Island on Sunday — the first strikes in over a month — after IRGC forces were observed preparing to launch rockets carrying sea mines into the Strait of Hormuz. The Strait is one of the world's most important oil chokepoints, with roughly a fifth of globally traded petroleum liquids passing through it, which is why any threat to shipping there tends to translate quickly into a geopolitical risk premium on crude.

Iran retaliated by launching ballistic and anti-ship missiles from multiple provinces, striking two US bases in Jordan: King Hussein and Al Azraq. A US source said most of the missiles were intercepted with no significant impact.

The geopolitical risk premium rose modestly, lifting oil prices, though this appears to be the kind of skirmish the market may quickly forget. Historically, oil markets have priced geopolitical escalations by discounting them unless they produce actual, sustained supply disruptions — and so far neither side has knocked barrels off the market in this exchange.

There is no appetite for further military operations, as the US is now pursuing economic warfare to force Iran into a deal. That approach centers on squeezing Iran's oil exports and revenue through sanctions, and it is the reason downside in oil prices is seen as limited: tighter enforcement against Iranian barrels effectively removes supply from the market even without further strikes. Overall, however, price action may remain mostly rangebound as diplomatic attempts continue to trigger selloffs.

Crude Oil Technical Analysis – Daily Timeframe

On the daily chart, crude oil is again approaching the 86.90 resistance. That is where sellers can be expected to step in with defined risk above the resistance, positioning for a drop back into the 78.00 support. Buyers, on the other hand, will look for a break to increase bullish bets toward the 93.50 level next.

Crude Oil Technical Analysis – 4-Hour Timeframe

On the 4-hour chart, a minor upward trendline defines the bullish momentum on this timeframe. If a pullback occurs to fill the gap, buyers will likely lean on the trendline with defined risk below it to keep pushing into new highs. Sellers, meanwhile, will look for a break to position for a drop into the 78.00 support next.

Crude Oil Technical Analysis – 1-Hour Timeframe

On the 1-hour chart, there is little to add: from a risk management perspective, buyers have a better risk-to-reward setup around the trendline, while sellers will likely wait for price to reach the 86.90 resistance or break below the trendline. The red lines define the average daily range for today.

Upcoming Catalysts

Tomorrow brings the US ISM Manufacturing PMI and US Job Openings data. On Wednesday, the US ADP report is released. On Thursday, Fed's Waller speaks, alongside US Jobless Claims and the US ISM Services PMI. On Friday, the week concludes with the US NFP report. Beyond the US-Iran headlines, these macro prints will shape expectations for fuel demand and the Fed's policy path, adding a second layer of volatility for oil traders to navigate. Key US-Iran developments will continue to drive price action.