Crude Oil Price Forecast: US-Iran Conflict Escalates Again, Will Brent Continue to Rise After Breaking $90?

TradingKey - The US and Iran exchanged direct fire again after more than a month, rapidly escalating shipping risks in the Strait of Hormuz and pushing international oil prices back above $90 a barrel.

During the Asian trading session on August 31, Brent crude (UKOIL) prices rebounded above $90, while WTI crude (USOIL) rose to $86 a barrel.

Why Are Crude Oil Prices Rising?

On August 30 local time, the U.S. military conducted airstrikes on two rocket launchers on Iran's Larak Island, marking the first time the U.S. military has struck targets inside Iran since late July.

U.S. Central Command spokesman Tim Hawkins said the U.S. detected Islamic Revolutionary Guard Corps personnel preparing to fire mine-laying rockets into the Strait of Hormuz. Having recently completed mine-clearing operations in the international shipping lane, the U.S. side described the action as a preventive strike to protect commercial shipping.

Iran denied the U.S. narrative, stating that the strikes caused military and civilian casualties. Iran's Islamic Revolutionary Guard Corps subsequently announced a missile attack on U.S. military targets in Jordan, though the missiles were reportedly intercepted by U.S. and Jordanian defense systems.

Although this U.S. action targeted only two launchers and was significantly smaller in scale than the hours-long bombing in late July, Iran's swift retaliatory response indicates that the situation still carries the potential for further escalation.

Connecting the Persian Gulf and the Gulf of Oman, the Strait of Hormuz is a vital conduit for crude oil exports from Saudi Arabia, Iraq, Kuwait, the UAE, and Iran. Prior to the conflict, roughly one-fifth of global oil supplies flowed through the strait; thus, even a partial disruption to navigation could significantly impact international energy markets.

Michael Alfaro, chief investment officer at energy hedge fund Gallo Partners, believes the new round of clashes underscores the fragility of the ceasefire and demonstrates that Iran retains the capability to disrupt free passage through the Strait of Hormuz. As long as this threat persists, it will be difficult for the geopolitical risk premium to fade entirely from oil prices.

Meanwhile, U.S.-Iran negotiations remain stalled, with an agreement originally aimed at halting clashes and reopening the strait having collapsed. The U.S. continues to exert pressure through military actions and sanctions, while Iran uses its control over the strait as bargaining leverage. This stalemate means that even if both sides temporarily avoid all-out war, oil prices could remain highly volatile for an extended period.

Crude Oil Price Technical Analysis: Will Brent Crude Continue to Rise?

Source: TradingView

On the daily chart, Brent crude recently rose to $90.61, breaking back above the psychological $90 mark and moving above its 20-day moving average of $87.81 and 60-day moving average of $84.31. The 20-day moving average remains above the 60-day moving average. In addition, oil prices have broken above the downward trendline extending from the March high, indicating that the previous bearish structure has improved and the short-term trend is turning bullish.

Meanwhile, oil prices have broken through the 38.2% retracement level at around $89.45, with the next major resistance level at $94.93. If daily prices can consolidate above $90 and further break through $94.93, upside potential could open toward $100.80. If the US-Iran conflict continues to push up the supply risk premium, prices could challenge $109.16 in a strong bullish scenario.

The RSI currently stands at 54.42, above the neutral 50 line and the signal line at 53.80, indicating that upward momentum is recovering. Meanwhile, there is still room before reaching the overbought territory above 70, so technicals are not yet showing clear signs of overheating.

On the downside, the first area to watch is the $89–$90 range. If oil prices hold this level on a pullback, it means $90 could turn from resistance into support, leaving the bullish structure intact. A fall back below $90 could lead to a retest of the 20-day moving average at $87.81. A further break below the 60-day moving average at $84.31 would weaken the current rebound structure, shifting downside support to $81.89.