Oil prices extended their strong gains in Thursday’s trading session, with U.S. WTI crude rising above $80 per barrel for the first time in more than a year after reports emerged that Iran had attacked a U.S. oil tanker in the Persian Gulf. The incident has raised concerns that conflicts in the Middle East could become more prolonged and cause serious disruptions to global energy supply chains.

Scattered attacks across the region continue to threaten energy infrastructure and commercial shipping operations, particularly for oil tankers passing through the Strait of Hormuz the strategic maritime corridor through which a large share of Middle Eastern oil reaches global markets. According to Alex Pierce, a commodities analyst at Schneider Electric, despite U.S.-led efforts to weaken Iran’s missile and drone capabilities, the country remains a significant threat to oil tankers and maritime transport in the region.

In a statement on Thursday, Iran’s Revolutionary Guard said it had struck a U.S. oil tanker in the northern Persian Gulf, setting the vessel ablaze. The news came just days after The Wall Street Journal reported another attack on a tanker transiting the Strait of Hormuz, further deepening concerns over global energy security.

The Risk of Tighter Oil Supply

Geopolitical risk is now beginning to affect physical supply directly. Iraq OPEC’s second-largest oil producer said its output could fall by more than 3 million barrels per day in the coming days if oil tankers are unable to move freely to loading ports in the Persian Gulf.

If this scenario materializes, several major refineries in India, South Korea, and the United States all of which rely on Iraq’s Basrah crude would be forced to seek alternative supplies of similar quality, which could place even greater strain on the crude market.

Rising Fuel Prices Create Political Pressure

In the United States, where fuel prices are always politically sensitive, gasoline prices have risen above $3 per gallon for the first time since November, placing significant pressure on Donald Trump and the Republican Party ahead of the midterm elections in November.

Meanwhile, diesel prices a fuel especially sensitive to Middle Eastern supply closed at $3.19 per gallon, the highest level since October 2023, and had earlier touched $3.45 per gallon during Wednesday’s trading session. U.S. diesel inventories have fallen sharply after a harsh winter, leaving the market even more vulnerable to supply shocks.

In the spot market, tightness is also becoming increasingly evident, with Brazilian light crude exports to China seeing premiums surge to $13–14 per barrel above ICE Brent, compared with just $2–3 per barrel before the conflict.

Technical Analysis: The Uptrend Remains Intact

WTI crude moving above $80 per barrel is not particularly surprising, as this was already the target zone highlighted in previous analyses.

Medium-Term Wave Structure

Oil is currently moving within an upward wave from red B to red C a directional wave characterized by large amplitude and extended duration.

Short-Term Wave Structure (D1)

On the D1 timeframe, WTI is advancing under the “Million Dollar Pattern No. 1,” with a five-wave white structure: t1 – l1 – t2 – l2 – t3.

At present, the market is in the main upward wave from l1 to t2, which explains why oil prices have been rising continuously over multiple sessions with increasingly wider daily ranges a typical feature of a strong impulsive wave.

Near-Term Target: $86–$93 per Barrel

Under a scenario in which tensions in Iran and across the broader Middle East continue to escalate, if oil prices break above the $93 per barrel zone, the market could realistically enter a three-digit price phase, re-establishing levels above $100 per barrel.

Conclusion

As oil prices remain elevated, the specter of inflation could return on a global scale. Energy is a core input for most production and transportation chains, meaning persistently high oil prices not only raise logistics costs but also feed through into the prices of goods, services, and end-user consumption.

This would force major economies to confront the risk of persistent inflation, narrowing the room for monetary easing and increasing the challenges facing global economic growth in the period ahead.

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