Four forecasts predict that oil prices could rise to US$130 per barrel in a worst-case scenario due to geopolitical tensions. Recent events, including successful US strikes on Iranian nuclear sites, have led to a slight decline in US equity index futures at the start of the week. Key developments include US bombings, causing minor changes in foreign exchange prices and potential effects on oil markets. The Strait of Hormuz, a vital oil transit route, remains open despite concerns that its closure could lead to major disruptions. ANZ warns that a disruption might push oil prices to US$95 per barrel. Citi estimates that if Iran’s oil production is disrupted by three million barrels per day, prices could rise to US$90. J.P. Morgan projects prices could hit US$120–130 if Hormuz is shut down. Goldman Sachs notes a US$10 geopolitical risk premium in current prices, while Barclays suggests that cutting Iranian exports by half could push prices to US$85, or even over US$100 in a regional conflict. In terms of market movements, Brent crude is just under closing a market gap and sits at a crucial point on a triple-top breakout pattern. This article highlights serious price expectations for crude oil amid rising tensions in the Middle East, particularly if disruptions affect Iranian production and shipping routes. The recent military strikes by the US on Iranian nuclear sites have created a cautious atmosphere at the start of the trading week, with small price drops in both equity futures and currencies. This shows how sensitive the current markets are to geopolitical risks. Despite concerns, the Strait of Hormuz remains open, which helps keep worst-case oil price estimates in check for now. The volume of oil passing through this strait is massive; a steady flow prevents prices from sharply increasing. According to ANZ, even a partial disruption could raise the barrel price to US$95, quickly affecting pricing models and pushing option markets to adjust for higher risks. Citi’s estimate of US$90 oil resulting from a three million barrels per day disruption shows that markets are closely analyzing supply issues region by region. In this scenario, we might see wider spreads between contracts that are physically delivered and those that are purely speculative. If supply halts exceed storage capacity, the backwardation may deepen. J.P. Morgan’s prediction of up to US$130 per barrel if the Strait closes is based on a severe scenario, but it still influences pricing behaviors as we anticipate physical disruptions. Their assessment indicates that a closure would have widespread impacts beyond just spot prices, resulting in quick changes in calendar spreads and a rise in volatility for call options. Goldman Sachs points out that around US$10 of current oil prices is attributed to geopolitical fears, not confirmed shortages. This context reminds us that risks aren’t evenly spread, and short-term contracts may have inflated premiums. If these premiums fall, traders long on sentiment might face rapid reversals. This situation reduces the incentive for derivatives traders to pursue price movements unless new supply data confirms disruptions. Barclays provides a middle-ground estimate, suggesting that if Iranian exports drop by half due to intensified sanctions or localized conflict, oil could surpass US$100. Their view aligns with historical data on supply shortfalls and futures prices. It’s not just about price levels—volatility could lead to strong intraday movements, especially on low liquidity days. Technically, Brent crude is at a pivotal point. A triple-top resistance pattern is close to breaking. As traders, we’re monitoring this closely—not because it’s solely predictive, but because it indicates where trailing stops may cluster. If the price breaks above, we could see quick buying, particularly from short-term funds employing breakout strategies. In the upcoming sessions, as geopolitical risks increase, we need to carefully adjust calendar spreads and gamma exposure. It’s not the time to rely heavily on static assumptions or cushion margins. The nature of developments—whether shipping interruptions or additional strikes—will affect open interest in options, particularly at key price points like US$110 or US$130. These levels not only become targets but also influence delta hedging that could lead to strong directional moves. For now, it’s important to reassess whether directional bets justify the cost, especially with potential skews caused by event risks rather than actual supply changes. Each additional strike or confirmed disruption alters the probabilities traders calculate. Being adaptable is more important than being early in these scenarios.

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