Commodities

Oil prices soften after surge from Middle East escalation

Nikos Tzabouras Written by Nikos Tzabouras

USOIL analysis

Hostilities between the United States and Iran continued for a second day after President Trump warned that Tehran "will have to pay the price" for stalling on negotiations [1]. US forces "completed additional self-defense strikes against multiple targets in Iran" [2] while Iran struck US bases in the region and declared a total closure of the Strait of Hormuz according to local media [3]. However, US CENTCOM said that commercial ships are continuing to transit [4]. Adding to the mixed signals, President Trump told Fox that he had spoken with Iranian officials who asked him to stop the strikes [5], but Iranian media rejected this claim [6].

The military escalation raises the geopolitical risk premium and exacerbates uncertainty around a deal that would allow the Strait of Hormuz to reopen. The prolonged blockade restricting supply has tightened the market and reverses previously unfavourable fundamentals. The IEA now sees a deficit "until the final quarter of the year" [7], and even if this crucial corridor reopens, flows could take months to restore. Exxon Mobil's CEO estimated one to two months during the May 1 earnings call [8], while the CEO of Saudi Aramco said rebalancing could extend to 2027 if the reopening of the Strait takes further weeks. [9]

USOil jumped on Wednesday following the geopolitical flare-up and now has the opportunity to reclaim the EMA200, which would shift the immediate bias to the upside and open the door to further gains. However, prices are subdued today as markets assess the situation, staying below this pivotal technical level and leaving USOil vulnerable to deeper declines.

Despite the hostilities, neither side appears ready to formally abandon the fragile ceasefire and President Trump has repeatedly expressed a preference for a deal, also using escalations as a tool to pressure Tehran. Moreover, the prolonged spike in crude prices is weighing on global economic activity and causing demand destruction, with the IEA expecting consumption to decline this year. Higher energy prices are sparking an inflationary impulse that is pushing central banks in a more hawkish direction, compounding economic and demand headwinds. This has also fuelled higher-for-longer Fed expectations that boost the USDOLLAR, adding further pressure on USOil.

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.

As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.

References

1

Retrieved 11 Jun 2026 https://truthsocial.com/@realDonaldTrump/posts/116725476229257491

2

Retrieved 11 Jun 2026 https://x.com/CENTCOM/status/2064876360259043642

3

Retrieved 11 Jun 2026 https://www.tasnimnews.ir/en/news/2026/06/11/3614150/iran-s-army-irgc-hit-several-us-military-targets-bases

4

Retrieved 11 Jun 2026 https://www.tasnimnews.ir/en/news/2026/06/11/3614120/iran-announces-total-closure-of-strait-of-hormuz

5

Retrieved 11 Jun 2026 https://x.com/TreyYingst/status/2064854010620780824

6

Retrieved 11 Jun 2026 https://www.tasnimnews.ir/en/news/2026/06/11/3614124/source-trump-s-claim-about-direct-talks-with-iranian-officials-sheer-lie

7

Retrieved 11 Jun 2026 https://www.iea.org/reports/oil-market-report-may-2026

8

Retrieved 11 Jun 2026 https://d1io3yog0oux5.cloudfront.net/_36f78089f8e261096df336a4766448a3/exxonmobil/db/2404/22642/pdf/1Q26+Earnings+Prepared+Remarks.pdf

9

Retrieved 15 Jun 2026 https://www.aramco.com/-/media/publications/corporate-reports/reports-and-presentations/2026/q1/saudi-aramco-q1-2026-webcast-presentation-script-english.pdf

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}
Learn More
Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, Friedberg Direct, FXCM or its affiliates takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of Friedberg Direct and FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the Friedberg Direct's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.**

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. The spread figures are for informational purposes only. Friedberg Direct is not liable for errors, omissions or delays, or for actions relying on this information.

Order Execution Only

Order Execution Only

Regulatory Documents:
CIRO: Avoiding Fraud and Protecting Your Investments, How CIRO Protects Investors, CIRO Complaints Brochure, CIPF Brochure, CIPF Coverage Policy, CIRO Order Execution Only Bulletin, Conflict Disclosure Statement, Covid-19 and Cyber Security - Tips for Investors, Relationship Disclosure Information Document, Notice of Acknowledgment, Before You Begin Trading

The relationship between Friedberg Direct and FXCM was formed with the purpose to allow Canadian residents access to FXCM's suite of products, while maintaining their accounts with a regulated Canadian firm. All accounts are opened by and held with Friedberg Direct, a division of Friedberg Mercantile Group Ltd., a member of the Canadian Investment Regulatory Organization (CIRO). Friedberg customer accounts are protected by the Canadian Investor Protection Fund within specified limits. A brochure describing the nature and limits of coverage is available upon request or at www.cipf.ca.

* The percentage of our retail client accounts that were profitable in each of the previous most recent quarters was: Quarter 1, 2026: 40% | Quarter 4, 2025: 49% | Quarter 3, 2025: 37% | Quarter 2, 2025: 36%. These figures are provided for transparency purposes only and do not constitute an indication of future performance or results.