03.04.202609:12 Forex Analysis & Reviews: Oil Prices Continue Their Sharp Rise

Yesterday, oil prices continued their rapid ascent. It is clear that the increase in oil prices will not be limited to the March surge of nearly 50% and will persist over the next two months. Against the backdrop of escalating conflict in the Persian Gulf, prices could stabilize at $200 per barrel. Even if OPEC+ decides to increase production on April 5, it is unlikely to have a significant impact on the market: the closure of the Strait of Hormuz and attacks on oil and gas infrastructure have already led to a nearly 20% reduction in production by cartel countries in March.

The situation in the Persian Gulf remains extremely tense. The presence of direct military confrontation, coupled with strikes on key oil extraction and transportation facilities, creates an unprecedented level of risk to global oil supplies. Panic in the market, driven by concerns over shortages, only exacerbates the situation, pushing prices higher. While Trump's statements and promises to end the war influence the market and slightly dampen its bullish momentum, major oil consumers such as China, India, and European Union countries are already feeling the repercussions of rising prices.

Increased production costs will inevitably lead to higher prices for finished goods, which could trigger inflationary pressures and slow economic growth. European authorities are already forced to seek alternative energy sources and revise their energy strategies; however, rapid diversification away from energy dependence is challenging. At the same time, oil-exporting countries, despite lower production volumes, may benefit from the sharp rise in prices, compensating for losses through the higher price of each barrel sold.

Meanwhile, amid the escalating energy crisis, Iran has taken a significant step to strengthen its control over one of the world's key arteries—the Strait of Hormuz. Iranian Deputy Foreign Minister Kazem Gharibabadi announced the development of a protocol with neighboring Oman, which essentially subjects ship movements through this vital maritime route to Iranian oversight. The strait, effectively closed since the onset of the current conflict, could now become a source of revenue for the Islamic Republic, as the protocol provides for tolls to be charged to shipowners.

This maneuver by Tehran is not just an attempt to capitalize on the situation; it is a strategic move aimed at demonstrating its growing influence in the region. The new agreement with Oman, if implemented, could further increase pressure on the international community by placing shipowners in a position to either pay tribute to Iran or face greater risks and uncertainty.

As for the current technical picture of oil, buyers need to take the nearest resistance at $113.36. This will allow them to target $118.88, above which it will be quite challenging to break through. The further target will be around $124.86. In the event of a decline, bears will try to take control at $106.83. If successful, breaking through this range would deliver a significant blow to bullish positions and push oil prices down to a low of $100.40, with prospects for further declines to $92.54.