Crude oil futures soared by 13% in the early market hours today as news agencies reported that Israel has launched a mass military air strikes via warplanes on Iranian soil, targeting its nuclear facilities and ballistic missile sites, a move that escalates dramatically the odds for instability across Middle East.
Isreal’s PM Netanyahu attempted to rationalize the decision to strike, as a preemptive measure to contain Iran’s efforts at acquiring a nuclear weapon by dismantling its nuclear enrichment program.
The strikes have also taken out the Iranian regime’s top generals, reportedly the Chief of Staff of Armed Forces and the commander of the Islamic Revolutionary Guard Corps, both of which were confidants of the Supreme Leader Ayatollah Khomeini, but also the backbone of Iran’s military command.
Furthermore, consultations between the US and Iranian delegations for a nuclear deal have now completely collapsed and probabilities for a major war breaking out is in everyone’s minds
The response from markets has been increasingly concentrated around crude oil, with traders swiftly reacting to the news, leading to the largest intraday gain of the commodity since March of 2022, around the time when Russia launched its operations in Ukraine.
The prospect of a broader Middle East conflict threatens to disrupt the Strait of Hormuz, a key route for about 20% of global oil flows and should the supply lines go offline, broader spikes in the commodity’s price are expected to take place.
Technical Analysis
WTI Chart – WTI futures torpedoed to 6-month highs after Israel’s rogue strikes on Iran
Resistance: 77.60 (R1), 80.70 (R2), 85.00 (R3)
Support: 68.50 (S1), 64.50 (S2), 60.00 (S3)