OPEC+ production increases face mounting risks tied to the Strait of Hormuz, as the US–Iran deadline approaches on Tuesday. Crude prices remain vulnerable to headline-driven swings, whether pointing to prolonged disruptions or a path toward stabilization.
The OPEC JMMC meeting was held this Sunday, with key members including Saudi Arabia, Kuwait, the UAE, and Iraq agreeing to a symbolic production increase of 206,000 bpd. However, this increase faces export risks via the Strait of Hormuz, as markets assess whether supply can effectively reach global markets. The move aims to support a smoother normalization in crude and energy prices, potentially easing inflationary pressures globally.
Key Events to Watch This Week
- Alignment or continued divergence in narratives between the US and Iran regarding terms to end the conflict
- The opening or extended disruption of the Strait of Hormuz
- US CPI data on Friday; stronger inflation would reinforce hawkish central bank expectations and risk-off sentiment amid elevated energy prices
- Disruptions to key oil and gas facilities across the Middle East, contributing to the ongoing supply shock
Key Charts and Levels to Watch
- DXY: a close above 100.60 could extend downside pressure across currencies and precious metals, while a move below 98 may support rebounds across FX and metals
- Crude oil: holding above the 118 level would extend upside risks toward the 130–150 range, intensifying pressure on the global economy. A move back below 88 would signal initial easing
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Crude Oil Weekly Outlook: 2-week Time Frame – Log Scale
Source: Trading view
As we enter Q2 2026, crude oil prices continue to point toward further upside risks in line with ongoing energy disruptions in the Middle East, despite headlines on potential de escalations. From a price action perspective, crude is:
- Holding above the 2023 highs and resistance at $91–93 per barrel
- Showing a strong rejection from the $84 zone
- Persistently Closing near the $100 mark as markets enter the sixth week of the Middle East conflict, keeping the upside scenario favored at the start of the quarter
Bullish scenario
A close above 110 on WTI and 115 on Brent would extend upside projections toward the 118 yearly high and further into the 135–150 range, signaling continued disruption to energy supply, infrastructure, and alternative routing around Hormuz. Upside levels are forecasted via the Fibonacci extension tool placed between the lows of 2020, highs of 2022, and lows of 2025.
Bearish scenario
A close below 89 would extend short-term downside risks toward the 82 and 74 zones, aligning with the highs of 2025 and previous Middle East conflict levels, where support may emerge. A break below these levels could shift price action back toward the $60 zone, in line with broader policy-driven normalization.
Written by Razan Hilal, CMT
Follow on X: @Rh_waves
