Oil Prices Retreat After Iran-Israel Tensions Drive Weekly Surge
The escalating conflict between Iran and Israel pushed crude oil prices to five-month highs this week, with both benchmarks gaining over 7% despite Wednesday’s pullback.
Brent crude settled at $75.39 per barrel while WTI reached $73.32, according to official market data. Tuesday’s trading saw oil prices climb more than 4% as President Trump left the G7 summit early to address the Middle East crisis.
His subsequent warning for Tehran residents to evacuate immediately heightened fears of potential supply disruptions. The market reacted strongly to these developments, with trading volumes surging well above average levels.
The conflict has now entered its sixth day, with Israel confirming strikes near Tehran while Iran launched retaliatory missiles. This escalation raises significant concerns about Iran’s oil infrastructure.
It also threatens the strategic Strait of Hormuz, through which approximately 25% of global seaborne oil trade passes. Technical indicators reveal overbought conditions that likely contributed to Wednesday’s price retreat.
The Relative Strength Index (RSI) readings stand at 72.87 for Brent and 73.56 for WTI, well above the 70 threshold that typically signals overbought territory.
Similarly, the MACD indicators show positive values of 2.01 for Brent and 2.26 for WTI, confirming strong upward momentum despite the day’s pullback.
Market fundamentals remain relatively stable despite the geopolitical tensions. U.S. crude inventories decreased by 3.6 million barrels last week to 432.4 million barrels, positioning stocks 8% below the five-year average.
Refinery utilization rates climbed to 94.3%, indicating robust domestic demand. Global supply continues to exceed demand projections for 2025.
Oil Market Balances Rising Supply with Geopolitical Risks
The International Energy Agency forecasts global oil supply will rise by 1.8 million barrels per day to 104.9 million barrels per day this year. Meanwhile, demand growth has been revised downward to 720,000 barrels per day due to weaker deliveries in the United States and China.
OPEC+ maintains substantial production cuts totaling 5.86 million barrels per day, representing 5.7% of global demand. These cuts, extended into 2025, aim to stabilize the market amid sluggish demand growth and rising U.S. production.
U.S. crude output continues to set records, with the Energy Information Administration projecting production to average 13.59 million barrels per day in 2025. This robust domestic supply provides a buffer against potential Middle Eastern disruptions.
The oil market now faces a critical juncture. While fundamentals point toward ample global supply, the geopolitical risk premium will likely keep prices elevated in the near term as traders closely monitor developments in the Iran-Israel conflict and potential impacts on global oil flows.
Deep Dive
For the complete picture, read our in-depth guide: Iran War and Hormuz Crisis 2026: Oil, Latin America and the Global Fallout
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| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| GOLD | 4,057 | +0.25% | +20.34% | 4,047 | 4,085 | 4,024 | 111,667 |
| SILVER | 58.50 | +1.21% | +49.91% | 57.80 | 59.29 | 57.36 | 25,963 |
| BRENT | 98.17 | -2.50% | +41.91% | 100.69 | 101.16 | 95.14 | 29,646 |
| WTI | 90.41 | -1.93% | +36.92% | 92.19 | 92.83 | 87.68 | 334,046 |
| COPPER | 6.34 | +0.50% | +9.68% | 6.30 | 6.38 | 6.31 | 28,395 |
| LITHIUM | 67.81 | -1.75% | +51.94% | 69.02 | 68.69 | 67.73 | 177,410 |
| IRON ORE | 161.91 | — | +64.24% | 161.91 | 161.91 | 1 | |
| SOY | 1,253 | +1.21% | +24.72% | 1,238 | 1,257 | 1,238 | 166,916 |
| CORN | 487.25 | +5.01% | +21.28% | 464.00 | 492.00 | 479.25 | 257,469 |
| WHEAT | 679.00 | -2.48% | +25.39% | 696.25 | 711.25 | 659.50 | 117,726 |
| COFFEE | 314.20 | +1.55% | +3.07% | 309.40 | 318.55 | 306.40 | 14,168 |
| SUGAR | 14.76 | +0.48% | -10.92% | 14.69 | 14.79 | 14.54 | 45,966 |
| COCOA | 5,331 | +0.57% | -34.38% | 5,301 | 5,438 | 5,227 | 17,604 |
| COTTON | 80.00 | +0.20% | +18.80% | 79.84 | 81.75 | 79.75 | 11,312 |
| CATTLE | 342.05 | -0.50% | +4.00% | 343.77 | 345.48 | 337.25 | 9,940 |
| USD/BRL | 5.08 | -0.05% | -7.87% | 5.08 | 5.09 | 5.05 | — |
| USD/MXN | 17.48 | -0.26% | -5.71% | 17.52 | 17.52 | 17.43 | — |
| BTC | 64,088 | -1.47% | -45.86% | 65,045 | 65,714 | 63,726 | 26,311,903,232 |
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