Oil prices surged on Monday after shipping through the Strait of Hormuz a critical maritime chokepoint was disrupted by Iran’s retaliatory attacks, following initial airstrikes by Israel and the United States that killed Iran’s Supreme Leader Ayatollah Ali Khamenei.

Brent crude at one point jumped as much as 13% to $82.37 a barrel, the highest level since January 2025. U.S. West Texas Intermediate (WTI) rose more than 12%, hitting an intraday high of $75.33 a barrel, the highest since June. The sharp rally directly reflects growing concerns over potential disruptions to physical supply in the global oil market.

The Strait of Hormuz, located between Iran and Oman, is the key passage linking the Persian Gulf to the Arabian Sea. Under normal conditions, around one-fifth of global oil demand is shipped through this route each day, including crude from Saudi Arabia, the UAE, Iraq, Iran, and Kuwait, as well as refined products such as diesel, jet fuel, and gasoline bound for major Asian consumers especially China and India.

While some alternative routes exist, a disruption at the Strait of Hormuz could remove 8–10 million barrels per day from the market. As security risks escalate, several major shipping companies have confirmed they are temporarily suspending transits through the area, while insurance costs have surged, intensifying the supply shock.

Against this backdrop, markets are starting to reprice the worst-case scenario: oil could break above $100 a barrel, echoing the early phase of the Russia–Ukraine conflict.

Technical Analysis: The Uptrend Is Becoming More Pronounced

On the daily timeframe, WTI crude continues to maintain a classic bullish structure, with higher highs and higher lows. This is a clear sign that the uptrend is developing in a sustainable manner rather than being a short-lived move

Medium-Term Wave Structure

Oil is currently moving within an upward wave from Red B to Red C. This is a directional impulse-type advance, typically associated with a large price range and a longer duration.

Short-Term Wave Structure (D1)

On the D1 timeframe, WTI is advancing in what you refer to as “Million-Dollar Pattern No. 1,” forming a five-wave (white) structure: t1 – l1 – t2 – l2 – t3.
At present, the market is in the primary bullish leg from l1 to t2, which explains why prices have risen for several consecutive sessions with expanding daily ranges a classic characteristic of an impulsive (push) wave.

Technical Targets & Extension Scenarios

• Near-term target: $76 → $79 per barrel

• Medium-term target: $86–$90 per barrel

If tensions in Iran and the broader Middle East continue to escalate, the likelihood of oil holding above $80 per barrel throughout 2026 remains entirely plausible supported by both technical structure and fundamental drivers.

Conclusion

The current surge in oil prices is not merely a short-term reaction. It is being underpinned by systemic geopolitical risk, particularly the threat of disruption at the Strait of Hormuz. Combined with a clearly bullish technical structure, the oil market appears to be entering a phase in which large swings could become the “new normal.”

With oil holding at elevated levels, the specter of inflation could return globally. Energy is a core input across most production and transportation chains, so persistently high oil prices not only raise logistics costs but also ripple through to the prices of goods, services, and end-consumer spending. This leaves major economies facing the risk of sticky inflation, narrows the room for monetary easing, and increases the challenges to economic growth in the period ahead.

In such an environment, professional investors should prioritize risk management and closely monitor geopolitical developments, as any further escalation could quickly push oil prices into an entirely new range.

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