- Brent crude oil price retains a bullish outlook as new strikes by Houthi rebels on Saudi oil facilities keep the oil risk premium elevated.
Current Setup
Brent crude is currently in a new acceleration phase, with price trading around the $107–108 per barrel range after registering a 3% jump to commence the new week’s session. The latest uptick comes as renewed attacks on vessels in the Strait of Hormuz and the takeover of strategic shipping points in Saudi Arabia by the Houthi rebels reinforce concerns of an expanding disruption to Middle East oil flows.
The initial Iranian supply disruption factor is no longer the only consideration. The markets are now increasingly pricing in a broader Gulf logistics and infrastructure shock.
With Brent crude oil prices now well above the $100 mark, the bias is strongly bullish. However, the speed and steepness of the rally also raise the risk of a sharp pullback if conditions normalize.
Fundamentals Currently Driving Brent Crude Oil Price
1. Strait of Hormuz Disruption
Disruptions to oil shipping via the Strait of Hormuz remain the primary driver of crude oil prices. The main data point here is the trend in daily shipping traffic, which at one point last week dropped to just 2 vessels in 24 hours. This represented 3.33% of normal daily flow and signals a dramatic drop below normal levels. Reuters reports indicate that only four commodity vessels transited and exited the Strait over the weekend, well below the 10-day average of 14 per day. This waterway carries a fifth of the world’s global crude supplies.
2. Saudi Infrastructure Damage
Saudi oil infrastructure damage is now part of the fundamental equation. Saudi Arabia’s East-West pipeline, an important alternative route that enables shipping to bypass Hormuz, was hit by a Houthi drone attack. The potential for further Houthi attacks on Saudi oil facilities is now part of the geopolitical risk matrix.
3. Diplomacy
The planned Iran-Gulf meeting to set up arrangements to reopen Hormuz was postponed. This removes an immediate de-escalatory catalyst and keeps the geopolitical risk premium elevated.
Brent Crude Oil Price: Forecast Scenarios
Base case – Bullish: This scenario sees Brent crude oil price consolidating above $105 and possibly pushing toward $110–115. This scenario is valid as long as Hormuz traffic remains severely restricted (current state).
Bull case – Supply shock: Any subsequent attacks on energy infrastructure in the Persian Gulf, prolonged closure of alternative conduits for oil exports, or additional tanker incidents in Hormuz could send crude prices soaring toward $115–120.
Bear case – De-escalation: A working agreement between Iran and the US/Gulf partners to restore tanker traffic in Hormuz, along with reopening the Saudi East-West pipeline, is a de-escalatory driver that could send prices toward below $95 as the risk premium unwinds.
Technical Outlook
Brent crude has decisively breached the 100.00 psychological level and the 102.00 resistance. However, it stopped just short of 111.10 (the 7 April and 19 May high), which now serves as the major technical resistance level.
The 9 March/19 March high of 119.50 is the potential upside reference if the 111.10 barrier is uncapped, a situation that continued supply disruptions could unlock. This scenario remains valid as long as price remains above 102.00.
However, a breakdown of 102.00 by a price retracement makes a case for a push towards the late May/early June highs at 97.72. A further retracement, driven by the unwinding of the risk premium, targets the 91.37 low of late May/early June 2026.