- Brent crude oil prices have surged to $109 per barrel on a significant escalation of the US-Iran geopolitical tensions.
Current setup
Bias: bullish.
Brent crude oil prices have spiked to $109 per barrel as the renewed US-Iran conflict takes on a new dimension this week. The strikes from both sides and attacks on shipping have increased sharply, raising serious concerns about the possibility of prolongd crude supply disruptions. At the current price, the Brent crude benchmark has gained nearly 34% from the lows seen in early-August 2026.
Macro Drivers for Brent Crude Oil Prices
1) Strait of Hormuz Shipping
Shipping through the Strait of Hormuz is the most dominant driver. This week, shipping across Hormuz has suffered a systematic decline. On Wednesday 9 September, only 8 ships were monitored to have crossed the Strait. This has dwindled to 2 ships in the last 24 hours, which is just 3.33% of the normal pre-war daily levels. The reason for the sharp weekly decline is the systematic attacks on vessels by Iranian forces. The blockade of this critical oil shipping conduit has choked off supply, especially to top energy importing countries such as China and India.
Additional disruption → ↑ supply concerns → ↑Brent crude oil prices
2) US-Iran Conflict Has Intensified
The recent strikes on oil tankers has compounded the Hormuz situation and is viewed as a significant escalation. The US has also struck Iranian tankers, with Iran threatening further retaliation. This situation significantly increases the chances of a prolonged crude supply disruption.
3) Chinese Demand Ramp
China has ramped up its crude purchases in recent weeks following a period of subdued demand. This increase in Chinese buying adds demand pressure to the pricing of crude, which is already elevated due to the Hormuz supply disruptions.
Brent Crude OIl Price Catalysts
The major price catalysts for Brent crude oil prices in the near term include:
- Strait of Hormuz shipping volumes: this can be monitored via several online resources. Absolute numbers are now the go-to data source to measure the state of the blockade.
- US-Iran military activity: the strikes that took an increased dimension this week are a measure of the degree of escalation of the conflict, especially as it affects energy infrastructure in the region.
- Attacks on Gulf/Red Sea energy infrastructure
- Chinese crude imports: this is a factor that has assumed importance due to China’s status as the world’s largest energy importer.
Brent Crude Oil Price: Forecast Scenarios
Base case: The possibility of a push towards $114 is well and truly on course as long as the strikes and shipping disruption persists.
Bull case: If the attacks continue or are scaled upwards, the markets could brace for a much more prolonged Hormuz disruption. This would lead to a break above the $114 high for 2026, with a potential to hit new multi-year highs.
Bear case: credible moves towards a de-escalation along with a restoration of Hormuz shipping leads to a rapid unwinding of the geopolitical risk premium. Oil prices could plunge towards $85 or even less.
Technical Outlook
Resistance: 188.20, followed by 114.86-119.50
Support: 102.00, followed by 97.72.
As long as price remains above the 102.00 support, the upside move towards 111.80 (7 April and 20 May highs) remains valid. A sustained break above 111.80 makes a case for a reclaim of the 114.86 resistance.
However, a breakdown of the 102.00 support exposes the 97.72 support. If the decline breaks down this support, a move to the 28 May support at 91.37 becomes eminent.