Another Volatile Week for Oil Markets

Crude oil traders faced a volatile week as prices reacted to a combination of geopolitical tensions, supply-side shifts, and macroeconomic signals.

While Middle East conflicts and fresh sanctions on Iran provided bullish catalysts, downside risks emerged from Russian supply prospects, U.S. tariffs, and uncertain Chinese demand. With the market caught between these forces, traders need to assess whether the next move favors an upside breakout or a renewed selloff.

Middle East Conflicts and Sanctions Create Bullish Setups

Geopolitical tensions in the Middle East provided strong bullish drivers for crude prices this week. The U.S. escalated military action against Yemen’s Houthi rebels following continued attacks on Red Sea shipping. Given that this waterway handles a significant portion of global oil transport, any disruption here could tighten supplies and lift prices. Meanwhile, Israel’s military operations in Gaza added another layer of uncertainty, reinforcing risk premiums?.

Adding to the bullish case, the U.S. introduced new sanctions targeting Iranian crude shipments, including Chinese “teapot” refiners—private firms that process a major portion of Iran’s oil exports. While the impact on actual flows remains uncertain, these sanctions signal a tougher stance, which could reduce Iranian crude supply over time. For traders, this event suggests a potential long trade if evidence of tightening supply emerges.