Crude oil prices experienced significant volatility over the past week, driven by geopolitical tensions between the United States and Iran. Brent crude oil rose for two consecutive weeks, reaching a high of $109 by the end of last week, its highest since March 16. The gains were fueled by President Donald Trump's review of Iran's 14-point proposal and ongoing military posturing in the Middle East.
Over the weekend, Trump confirmed receiving a 14-point plan from Iran, which included a one-month deadline for negotiations on reopening the Strait of Hormuz, ending the US naval blockade, and permanently ending conflicts in Iran and Lebanon. The proposal also called for another month to negotiate a new nuclear agreement. However, Trump expressed dissatisfaction with the proposal, warning he may order new strikes if Iran misbehaves, leading some in his administration to believe Iran is buying time.
On Monday, crude oil prices pulled back after Trump announced Project Freedom, an initiative to escort ships through the Strait of Hormuz. West Texas Intermediate (WTI) dropped to $99.25 from last week's high of $110, while Brent fell to $108. The challenge remains that Iran has mined some routes and can use drone attacks, making ships reluctant to traverse the Strait even with US escorts.
Trump hinted at positive discussions with Iran, noting that restarting the war would be disadvantageous as Iran holds escalation advantages, including blocking the Red Sea and attacking energy infrastructure in the Persian Gulf. Analysts believe any renewed conflict could push oil prices significantly higher, potentially to $120 or more.
Technical analysis on the weekly chart shows Brent forming a bullish flag pattern above a descending channel, with a golden cross pattern indicating further upside. Conversely, WTI shows a potential diamond reversal pattern on the daily chart, suggesting a possible pullback to $95.
