The rally followed continued US and Israeli airstrikes on Iran and retaliatory missile and drone attacks by Tehran across the region, including Lebanon, Saudi Arabia, Qatar and Dubai.
The escalation has disrupted regional energy flows and heightened fears over the Strait of Hormuz, through which roughly 20% of global oil supplies pass. Any prolonged disruption to this chokepoint could significantly tighten global supply and push up fuel costs.
European natural gas prices also jumped nearly 40% after Qatar’s state-run energy company said it had halted liquefied natural gas production, adding to concerns over broader energy market instability.
US President Donald Trump said the military campaign, which began on Saturday with a strike that killed Iran’s Supreme Leader Ayatollah Ali Khamenei, was progressing “substantially” ahead of schedule but could continue for more than four weeks. He said the objectives include destroying Iran’s missile systems, navy and nuclear programme and stopping its support for armed groups in the region, but did not call for regime change.
The US State Department urged Americans to leave the Middle East from Egypt eastward. Meanwhile, a general in Iran’s Revolutionary Guards threatened to “burn any ship” navigating the Strait of Hormuz and said Iran would attack oil pipelines and block oil exports from the region. He warned that oil prices could reach $200 in the coming days.
The sharp rise in crude has revived concerns about inflation globally. Higher energy costs could complicate central banks’ efforts to bring down inflation while also considering interest rate cuts to support growth.Technical analysts at Samco Securities said the rally in crude was in line with earlier projections. In an earlier note, the broker had highlighted a breakout above $66 as a trigger for further gains. “The breakout above $66 unfolded swiftly, with prices surging towards $70 and beyond after the US-Israel strike on Iran injected a sharp geopolitical risk premium into energy markets,” Samco said.
The brokerage added that crude is now approaching a key resistance level near $77.65, which had capped prices in the previous cycle. It cautioned that geopolitical events often lead to sharp price extensions that later stabilise once the immediate news is absorbed by markets.
“With crude already reacting sharply to the conflict narrative, the probability of consolidation or cooling off has increased,” Samco said, advising traders to avoid chasing the current rally and to wait for a pullback towards prior breakout levels for better risk-reward opportunities.
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