Investor focus is zeroed in on the Strait of Hormuz, through which nearly 20 million barrels per day—about one-fifth of global consumption—flows. Analysts warned that any attempt by Tehran to restrict traffic through this strategic chokepoint would have sweeping market implications. Rabobank emphasized the vulnerability of key producers like Saudi Arabia, Kuwait, Iraq, and Iran, all reliant on this narrow passage for exports.
OPEC capacity and U.S. drilling trends add complexity to outlook
Iran, a core OPEC member, exports over 2 million bpd, with spare capacity from OPEC+ roughly equivalent. While Iranian officials reported no damage to oil infrastructure, the risk of future strikes—particularly targeting export terminals like Kharg Island—remains high. Societe Generale’s Ben Hoff noted a potential shift toward an “energy-for-energy” retaliation pattern, amplifying supply-side fears.
Meanwhile, U.S. production signals a softening trend. Baker Hughes reported a seventh consecutive weekly decline in rig counts, with oil rigs falling to 439, the lowest since October 2021. This underlines a tightening domestic supply outlook, which could compound market volatility if Middle East supply is disrupted.
Speculators bet on $80 WTI as hedging activity intensifies
Market sentiment is also reflected in options activity. CME data shows traders exchanged over 33,000 contracts for August 2025 WTI $80 call options on Friday—the highest volume since January. This surge signals growing conviction that prices could break higher as geopolitical tensions deepen.
Oil prices forecast: Bullish with $100 Brent in sight
The current geopolitical escalation places a bullish floor under oil prices, with Brent potentially testing $100 if the Strait of Hormuz or regional infrastructure comes under direct threat. Traders should prepare for further volatility, particularly if retaliatory actions escalate or disrupt critical supply routes.
More Information in our Economic Calendar.
