Oil prices dropped sharply after Iran targeted a US military base in Qatar but avoided disrupting oil shipping. Brent and WTI crude oil (CL) fell more than 7%, marking the steepest one-day loss since 2022. The limited retaliation helped calm fears of an immediate supply disruption through the Strait of Hormuz.
Traders had initially priced in supply risks, pushing prices higher on Monday. However, Iran’s decision to spare shipping routes eased tensions. Markets interpreted the attack as a controlled escalation rather than a broader conflict.
The ceasefire announcement from President Trump triggered a further decline in the price of crude oil. The risk premium on oil has faded for now, but uncertainty remains if either side breaks the agreement. Oil prices show strong volatility during the Iran-Israel conflict and await further news on geopolitical developments.
WTI Oil Daily Chart – Strong Volatility
The daily chart for WTI crude oil shows that the price hit resistance at the red dotted trendline near the $77 area. After reaching this level, the price dropped toward the $65 support level. A break above $77 may lead to a move toward the $84 area, and a sustained move above $84 could initiate a long-term rally in oil prices. However, oil prices exhibit intense volatility in the $65 to $77 range.
WTI Oil 4-Hour Chart – Descending Broadening Wedge
The strong resistance in WTI crude oil around the $77 area is also confirmed by the target of the descending broadening wedge pattern that has been forming since February 2025. A break above $77 could trigger a strong upward move; however, immediate support lies near the $65 area.
