Crude oil rises to June highs amid renewed US-Iran tensions

Fundamental backdrop

Oil's latest advance stems from a sharp revival of Middle East tensions, with the Strait of Hormuz again in focus. Fresh US strikes on Iranian targets followed reported assaults on commercial vessels and American forces. Tehran, for its part, has warned it could hinder Gulf crude shipments and adopted a more assertive stance in the strait.

The price increase reflects a higher risk premium, driven particularly by expectations of a prolonged conflict. In early August, it appeared tensions were easing and military steps had been put aside. This week, a new escalation shifted that view, fueling worries of an even lengthier war.

The key question is whether this is a brief flare-up or a drawn-out conflict. Trump has said the current campaign against Iran would not last "too long", so signs of de-escalation might erode this week's gains. Downside risks are capped, with crude expected to trade in a broad range above $80. However, in the near term, a de-escalation could prompt a pullback to the 87.00 support.

Crude oil daily technical picture

On the daily chart, crude oil nears the July high near 93.50. That level is where sellers may enter with a defined risk above it, aiming for a decline to the 87.00 support. Buyers, conversely, seek a breakout to step up bullish positions toward the 97.00 mark.

Crude oil 4-hour technical view

On the 4-hour chart, an upward trendline marks the bullish momentum. A pullback would likely see buyers use the trendline as a level to buy, with risk below it, aiming for fresh highs. Sellers, meanwhile, await a trendline break to join a move toward the 87.00 support.

Crude oil 1-hour technical view

On the 1-hour chart, from a risk management standpoint, buyers have a favorable risk-reward near the trendline, while sellers may start building positions at current levels and add bearish bets if the trendline breaks. The red lines mark today's average daily range.

Key upcoming catalysts

Today's schedule includes remarks from Fed's Waller, US jobless claims, and the ISM services PMI. Friday ends the week with the US nonfarm payrolls report. However, US-Iran developments will remain the main focus.