Brent extends gains on rising Middle East tensions, reinforcing disruption fears in oil markets

Brent oil surged on Monday as tensions in the Middle East intensified, following the US announcement of an operation to reopen the Strait of Hormuz, while Iran reported striking a US warship attempting to enter the strait.

Amid the escalating conflict, OPEC+ agreed to increase output by 188,000 bpd in an effort to partially offset the growing disruption to global supply after Iran closed the strategic waterway. However, market participants largely view the move as symbolic, with limited immediate impact as Gulf exports through Hormuz remain constrained.

The contract price rallied sharply above the $110 level, reaching $114.27, just below last week’s recovery high at $114.68.

Near-term price action is expected to remain biased to the upside as long as traffic through Hormuz stays restricted, while increasingly aggressive rhetoric from both sides continues to fuel fears of further escalation and supports oil prices.

Daily technical indicators remain firmly bullish, with pullbacks over the past three sessions repeatedly contained above the broken Fibonacci 61.8% level, supported by the rising 10DMA at 106.54. Price continues to hold above the ascending and thickening daily Ichimoku cloud, while the Tenkan-sen and Kijun-sen maintain a widening bullish crossover.

A sustained move above $110 is needed to confirm the bullish signal, with a break through recent highs at $114.27/$114.68 likely to strengthen the structure and open the way toward the key $120 resistance zone.

On the downside, strong support lies at the 106.00 zone (today’s low and 10DMA), which is expected to limit dips and keep bulls in control, ahead of deeper supports at $102.63 (daily Kijun-sen) and $100.94/100.00 (daily cloud base and psychological level).

Res: 111.37; 112.66; 113.50; 114.68
Sup: 110.00; 107.78; 106.54; 105.64