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| Chatly.ai |
Kuala Lumpur, April 14, 2026: Crude oil, which is arguably the world's most important commodity, is on everybody's mind right now.
The flared-up conflict in the Middle East is increasing
risks of a major oil supply shock, potentially pushing the price of 'black
gold' into the stratosphere and completely derailing the global economy.
Given as much as 90% of international trade is transported across oceans, maritime safety is critical for smooth flow of oil.
In this article, Octa, a global retail broker, shares its
expert opinion on the unfolding situation and outlines possible scenarios for
the global oil market.
Octa Broker
As it often happens, the market started to price in the
possibility of a new conflict in the Middle East well in advance. On 11 June,
oil prices rose more than 4% after reports surfaced that the U.S. was preparing
to evacuate its Iraqi embassy due to heightened security concerns in the
region. Two days later, Israel and Iran exchanged airstrikes, pushing both
Brent and West Texas Intermediate (WTI), the world's two major oil benchmarks,
to five-month highs as investors anticipated potential supply disruptions from
an open conflict. To this day, the conflict continues without resolution and
oil prices remain elevated even as there are some telltale signs that the
parties may be willing to negotiate.
'This burgeoning unrest introduces an unprecedented degree
of volatility, significantly amplifying the specter of a catastrophic oil
supply shock' , argues Kar Yong Ang, a financial market analyst at Octa broker,
adding that the conflict between Israel and Iran 'carries ominous potential to
propel crude prices to unprecedented levels, thereby unleashing a cascade of
detrimental effects that could, in the most dire of scenarios, cause a major
global economic crisis' .
Indeed, the Middle East in general and Iran in particular
play a pivotal role in global energy markets. A substantial portion of the
world's crude oil and liquified natural gas (LNG) is produced and exported in
this region. Iran itself, despite the existing sanctions on exports, remains an
important supplier of oil—notably, for China. Furthermore, a vast number of
ships carrying crude oil and LNG transit through the Strait of Hormuz, a narrow
yet vital chokepoint that Iran has repeatedly threatened to close. Should Iran
act on this threat and block the strait, the repercussions would be quite
severe, likely pushing global crude oil prices well above $100 per barrel, or
even higher, due to the significant disruption of supply.
Technically, if we look at a broader, long-term picture, WTI
crude oil seems to be moving sideways with a minor bearish tilt. On a daily
chart, the price still has not escaped from the bearish parallel
channel. However, due to the latest geopolitical news, the price has managed to
rise above the 200-day moving average (MA) and seems poised to break above the
critically important 77.60-78.00 area.
'Breaching the $80 handle should not be difficult if the
current situation deteriorates sharply' , says Kar Yong Ang. 'Continuing
destruction of oil infrastructure in Iran, potential U.S. involvement in the
war, countries' unwillingness to negotiate and, above all else, Iran's attempts
to block the Strait of Hormuz, all of this will have a bullish impact on
prices'. Indeed, a break above 80 level, would open the way towards 83.40,
85.20, 87.30, and 90.00 area.
Alternatively, in case the hostilities moderate somewhat,
other countries—particularly the U.S.—refrain from directly participating in
the conflict, and both Israel and Iran express willingness to negotiate,
bearish sentiment will immediately kick in. 'I think WTI oil may lose as much
as 5 dollars per barrel in the blink of an eye should we see some progress in
nuclear negotiations between Europeans and Iranians, which are due to commence
in Geneva this Friday' , concludes Kar Yong Ang. In this scenario, a break
below 71.50 level would allow bears to target 67.80, 64.80 and 61.70.
Overall, WTI crude price is now stuck in a broad range
between $70 and $80. The move above and below these two levels will essentially
indicate if the situation in the region is getting worse or is getting better.
The chart below shows potential bullish and bearish targets, marked in green
and red, respectively.
NYMEX light sweet crude oil (WTI) daily chart
Source: TradingView, Octa analysis and calculations
Octa
Octa is an
international CFD broker that has been providing online trading services
worldwide since 2011. It offers commission-free access to financial markets and
various services used by clients from 180 countries who have opened more than
52 million trading accounts. To help its clients reach their investment goals,
Octa offers free educational webinars, articles, and analytical tools.
The company is involved in a comprehensive network of
charitable and humanitarian initiatives, including improving educational
infrastructure and funding short-notice relief projects to support local
communities.
In Southeast Asia, Octa received the 'Best Trading Platform Malaysia 2024' and the 'Most Reliable Broker Asia 2023' awards from Brands and Business Magazine and International Global Forex Awards, respectively.
Disclaimer: This piece does not contain or constitute investment advice or recommendations and does not consider your investment objectives, financial situation, or needs.
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