Crude oil prices climbed sharply last week as the conflict between Israel and Iran worsened, raising fears that global oil supplies could be affected. The situation quickly became one of the most closely watched issues in the oil market, pushing prices to their highest levels since January. West Texas Intermediate (WTI) and Brent crude both rose nearly 7% over the week, as investors responded to the growing threat of disruptions in the Middle East.

The jump in prices came after Israel launched airstrikes on Iranian military and nuclear targets. Iran answered with drone and missile attacks on Israeli infrastructure. These direct strikes marked a serious escalation, and markets took notice. As the conflict entered a second week, there was no indication that either side was looking to stand down, and that kept traders on edge.

Why the Strait of Hormuz Matters to Oil Prices

A major reason oil prices moved higher was concern about the Strait of Hormuz. This narrow waterway off Iran’s southern coast is one of the most important oil routes in the world. Each day, about 18 to 21 million barrels of oil and petroleum products move through the strait—roughly one-fifth of the world’s oil supply.

So far, no attacks have taken place in the strait, and oil is still moving. But traders are worried that if the fighting spreads, tankers or export facilities could be targeted. That would put global supplies at risk, especially since Iran exports about 3.3 million barrels…

Crude oil prices climbed sharply last week as the conflict between Israel and Iran worsened, raising fears that global oil supplies could be affected. The situation quickly became one of the most closely watched issues in the oil market, pushing prices to their highest levels since January. West Texas Intermediate (WTI) and Brent crude both rose nearly 7% over the week, as investors responded to the growing threat of disruptions in the Middle East.

The jump in prices came after Israel launched airstrikes on Iranian military and nuclear targets. Iran answered with drone and missile attacks on Israeli infrastructure. These direct strikes marked a serious escalation, and markets took notice. As the conflict entered a second week, there was no indication that either side was looking to stand down, and that kept traders on edge.

Why the Strait of Hormuz Matters to Oil Prices

A major reason oil prices moved higher was concern about the Strait of Hormuz. This narrow waterway off Iran’s southern coast is one of the most important oil routes in the world. Each day, about 18 to 21 million barrels of oil and petroleum products move through the strait—roughly one-fifth of the world’s oil supply.

So far, no attacks have taken place in the strait, and oil is still moving. But traders are worried that if the fighting spreads, tankers or export facilities could be targeted. That would put global supplies at risk, especially since Iran exports about 3.3 million barrels of oil per day.

Several banks, including Goldman Sachs and JP Morgan, believe that current oil prices already include an extra $10 per barrel because of these concerns. If the strait were blocked or seriously threatened, some analysts think prices could jump to $120 or more.

Waiting on the U.S. Response

Markets are also watching how the United States will respond. President Trump has said a decision on possible U.S. involvement could come within two weeks. If the U.S. takes military action or supports Israel directly, the risk to oil shipments in the region would increase. That’s part of why oil prices stayed firm throughout the week—investors are waiting to see if the conflict grows or settles down.

Even though no supply has been lost yet, just the threat of problems is enough to push prices higher. Oil traders aren’t taking any chances while the situation remains uncertain.

Oil Supply Tightens as U.S. Inventories Drop

On top of the conflict in the Middle East, the latest U.S. inventory report added more support to oil prices. The Energy Information Administration (EIA) reported that U.S. crude stockpiles fell by 11.5 million barrels last week—the biggest drop in over a year. At the same time, U.S. oil exports increased while imports fell, pointing to either stronger demand or tighter supplies.

Gasoline demand also rose as Americans began hitting the roads for summer travel. Analysts believe this seasonal trend will continue, helping keep oil use steady and supporting prices.

Federal Reserve Suggests Possible Rate Cuts

Oil prices also got a boost from news out of the Federal Reserve. The Fed kept interest rates unchanged last week but said it might lower them twice by the end of the year. That raised hopes that the U.S. economy could pick up speed in the second half of 2025, which would increase fuel use.

At the same time, high oil prices could slow the economy by adding to inflation, which makes the Fed’s job harder. Still, for now, the market took the Fed’s comments as good news for oil demand.

Reports Show Global Supply May Still Be Ample

Despite all the concern over supply risks, the International Energy Agency (IEA) released a report last week that could limit further price gains. The agency lowered its forecast for global oil demand and raised its outlook for supply in 2025. That suggests there could be enough oil to meet demand, as long as major disruptions don’t happen.

Separately, officials from OPEC+ said they still plan to gradually raise production to meet higher summer demand. Russia’s top oil official emphasized the need to stay calm and avoid scaring the market with supply warnings. These statements helped ease some investor concerns about an immediate supply crunch.

Weekly Light Crude Oil Futures

WTI

Trend Indicator Analysis

The main trend is up according to the weekly swing chart. A trade through $77.13 will reaffirm the uptrend. The trend changes to down on a move through $52.49.

The long-term range is $51.98 to $82.91. Its 50% level at $67.44 is key support. Crossing to the strong side of this pivot is helping to support the upside momentum.

The market is also trading on the strong side of the 52-week moving average at $66.14. This is another major support level and trend indicator.

After a spectacular rally to $76.10 last week, the market remains in a position to challenge tops at $76.57 and $77.13. Traders are showing respect for these tops, but if taken out with conviction and high volume, prices could accelerate into another major top at $82.91.

Weekly Technical Forecast

The direction of the Weekly Light Crude Oil Futures market the week ending June 27 is likely to be determined by trader reaction to $71.46.

Bullish Scenario

A sustained move over $71.46 will signal the presence of buyers. If this creates enough upside momentum, we could see a near-term rally into the swing tops at $76.57 and $77.13. Taking out the later could trigger a near-term acceleration into at least $82.91.

Bearish Scenario

A sustained move under $71.46 will indicate the return of sellers. If it generates enough downside momentum, we could see a near-term correction into the support cluster at $67.44 to $66.14.

Oil Price Outlook: Tensions Support Higher Prices for Now

Looking ahead to next week, oil prices are expected to remain firm. The ongoing conflict between Israel and Iran, the risk of U.S. military involvement, and falling U.S. inventories are all factors keeping prices high. Unless there’s a quick ceasefire or clear de-escalation, traders are likely to keep pricing in risk.

At the same time, if the fighting doesn’t spread and oil continues to flow through the Strait of Hormuz, prices could level off. Much will depend on political developments and any further signals from oil producers.

For now, the oil market remains supported by concern over supply security—and until that concern fades, prices are likely to stay elevated.

Technically, from the bottom-up, light crude oil futures are expected to remain well-supported by the support cluster at $67.44 to $66.13, which could prove to be an attractive buy area if tested.

On the upside, trader reaction to $77.13 will set the tone. It’s either going to be resistance or a trigger point for a near-term surge into $82.91.