WTI rose by more than 3% on Monday as conflict in the Middle East escalated. It traded at $102.55 per barrel after moving up from a daily low of $96.45.<\/p>\n
UAE authorities said a fire broke out at Fujairah petroleum facilities after an Iranian drone attack. The UAE defence ministry said three missiles were intercepted and a fourth fell into the sea.<\/p>\n
CNN sources in Dubai said they expect US and Israeli attacks on Iran within the next 24 hours. A US admiral said Iran targeted commercial and US military ships with cruise missiles, and said six Iranian small boats were destroyed while they tried to disrupt commercial shipping.<\/p>\n
Iranian media said a US ship was hit, while Axios cited a US official saying no attack happened. Iran\u2019s Revolutionary Guards Navy published a map showing expanded control zones near the Strait of Hormuz, including Fujairah and Khorfakkan, and the coast of Umm Al Quwain.<\/p>\n
President Donald Trump announced \u2018Operation Freedom\u2019 to protect commercial shipping in the Strait of Hormuz. South Korea reported a fire and explosion on a vessel, and the UAE accused Iran of using drones to attack an ADNOC vessel in the strait.<\/p>\n
The UAE said it will exit OPEC and produce oil without restrictions. US Factory Orders rose 1.5% month-on-month in March, above 0.5% expected and 0.3% in February.<\/p>\n
Technically, WTI had an upward bias, with RSI above 50 and a bullish engulfing pattern. Levels cited were $103.86, $104.00, $107.35 and $108.00 on the upside, and $100.00 then the 50-day SMA at $89.65 on the downside.<\/p>\n
We recall the events of last year, when tensions in the Middle East caused a sharp spike in WTI crude to over $102 a barrel. The conflict, involving Iranian attacks on the UAE and subsequent US naval operations in the Strait of Hormuz, introduced a significant risk premium into the market. The UAE\u2019s departure from OPEC at that time also created long-term uncertainty about coordinated global supply.<\/p>\n
As of today, May 5, 2026, WTI is trading closer to $95 per barrel, reflecting a partial easing of those immediate supply fears. However, last week\u2019s Energy Information Administration (EIA) report showed a surprise build in U.S. crude inventories of 2.1 million barrels, against expectations of a draw. This suggests that near-term demand may be softening, creating a headwind against the lingering geopolitical risks.<\/p>\n
The Strait of Hormuz, the focal point of last year’s ‘Operation Freedom,’ remains a point of underlying tension, with shipping insurance premiums still elevated compared to pre-2025 levels. While direct military clashes have subsided, the expanded Iranian control zones declared last year mean any regional flare-up could quickly threaten this critical chokepoint again. This latent risk continues to provide a floor for prices, preventing a more significant slide.<\/p>\n
On the supply side, the UAE has steadily increased its output by nearly 400,000 barrels per day since leaving OPEC, adding barrels to the global market. Countering this, the remaining OPEC+ coalition, in their meeting last month, agreed to maintain existing production cuts through the third quarter to support prices. This creates a push-and-pull dynamic between disciplined core members and independent producers.<\/p>\n
Recent macroeconomic data from the U.S. shows inflation remaining stubborn at 3.1% and a stronger-than-expected jobs report, which has strengthened the U.S. Dollar Index to a six-month high. A strong dollar makes oil more expensive for holders of other currencies, which could weigh on global demand. This financial pressure is competing directly with the supply-side risks from the Middle East.<\/p>\n
Given this environment, a volatility-based strategy using options is prudent. Buying long-dated call options or call spreads allows traders to position for a potential price spike if Mideast tensions re-escalate, while defining risk if prices fall due to weak demand. Conversely, for those who believe macroeconomic headwinds will dominate, buying puts can offer downside protection or a speculative short position.<\/p>\n
From a technical standpoint, the market is caught between the 50-day moving average at $91.50 acting as support and the key psychological level of $100 acting as resistance. The “bullish engulfing” pattern we saw during the 2025 spike serves as a reminder of how quickly sentiment can turn on geopolitical news. Traders should watch for a decisive break of this range to signal the market’s next major direction.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" WTI jumped 3% above $102 as Middle East tensions flared, Fujairah attacked, Hormuz shipping risks rose.<\/p>\n","protected":false},"author":103,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-49420","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t