Oil News: OPEC Production Fears Grow as Iran Standoff Fuels Bullish Oil Outlook

Author: James Hyerczyk

Published: February 19, 2026

Key Points

• Crude oil prices are rising due to stalled negotiations over Iran's nuclear program and escalating military tensions.
• Approximately 20% of global oil supply passes through the Strait of Hormuz, raising concerns about potential supply disruptions.
• Analysts predict crude oil prices could increase by 15-20% if military conflict escalates and disrupts shipping in the Strait of Hormuz.

Current Market Situation

West Texas Intermediate (WTI) crude oil futures are experiencing gains as discussions between U.S. and Iranian officials have stalled. The military buildup in the region is causing traders to be increasingly concerned about future supply risks.

The Strait of Hormuz: A Critical Concern

The Strait of Hormuz is a vital waterway for global oil transport, with 20% of the world's oil passing through it. Analysts warn that if Iran were to block this passage, it could lead to significant supply shocks and price spikes in the oil market.

Potential Price Movements

Following a recent 4% increase in crude oil prices, further spikes are anticipated. If military action occurs, prices could rise an additional 5-10%, and potentially another 10% if the Strait of Hormuz is effectively blocked. Even after a ceasefire, the waterway may remain hazardous due to debris, complicating shipping routes.

Market Speculation and Concerns

Traders are grappling with several key questions regarding the duration of military activity, potential targets within Iran, and the likelihood of Iran successfully blocking tanker traffic. Historical precedents, such as Saddam Hussein's actions during the Gulf War, are influencing current market sentiment.

Technical Analysis

The oil market is currently driven by momentum and headlines. Key support levels are identified at $63.84 (uptrend line) and $60.84 (200-day moving average). Upside targets include previous highs at $66.27, $68.11, and $69.37.

Long-Term Outlook

Despite the current bullish sentiment, the author cautions against expecting prolonged high prices above $90 or $100 per barrel, as the global oil supply remains adequate. The primary focus for traders will be the potential blockage of the Strait of Hormuz and its implications for oil prices.

Conclusion

The situation remains fluid, and traders should remain vigilant as developments unfold. The interplay of military actions, geopolitical alliances, and market reactions will significantly influence oil prices in the near future.