Crude Oil Compression Builds as Middle East Risks Keep Traders on Edge

Crude oil has spent the past month navigating one of the most consequential geopolitical backdrops in recent memory. The US-Iran war and the effective closure of the Strait of Hormuz sent WTI surging to a high of $138 per barrel on April 7, before a ceasefire, diplomatic progress, and growing hopes of a negotiated resolution pulled prices sharply lower. As of late May, WTI is trading near the $96-$98 area with the market now compressing into a tightening range between key technical levels at 105 and 90, caught between supply shock fears on one side and diplomacy-driven relief on the other. The resolution of the Hormuz situation and the pace of Middle Eastern oil resumption remain the dominant variables for what comes next.Oil production with Iran flag by EVER STOCK via Shutterstock