Crude Oil Volatility Explained: Can prices cross $100 again amid Middle East tensions? Anil Singhvi breaks it down

Sharp volatility in crude oil prices and rising geopolitical tensions in the Middle East have kept global markets on edge, with investors closely tracking developments around the Strait of Hormuz and the ongoing conflict involving the United States, Israel and Iran.

Market expert Anil Singhvi said crude oil has been witnessing significant swings in recent sessions amid uncertainty over supply routes and escalating geopolitical risks. According to Singhvi, crude oil prices have largely been trading within a wide range as markets react to each new development in the conflict.

Why is crude oil volatile?

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Singhvi said crude oil had earlier climbed to around USD 120 amid fears of supply disruptions, but later corrected sharply to near USD 90. “Crude moved smoothly from around USD 120 to near USD 90 earlier. Now it is trading largely in the USD 80–USD 90 range but with heavy volatility,” Singhvi said.

He said prices recently moved between about USD 82 and nearly USD 90–USD 92 over a short period, reflecting high market uncertainty. According to Singhvi, conflicting signals related to the safety of oil shipments through the Strait of Hormuz also triggered sudden movements in crude prices.

A social media post by the US energy secretary suggesting that the US Navy would provide security to oil tankers passing through the route initially pushed crude prices lower. However, prices quickly rebounded after the White House clarified that no formal security guarantee had been announced.

Importance of the Strait of Hormuz

The Strait of Hormuz is one of the most critical shipping routes for global energy supplies. The waterway, located between Iran and Oman, connects the Persian Gulf to the Gulf of Oman and then to the wider world.

At its narrowest point, the strait is about 33 kilometres wide. It is considered an international shipping route even though Iran and Oman control territorial waters along the passage.

In the modern energy trade, the route is crucial for oil and liquefied natural gas shipments from countries such as Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates and Iran.

A large share of these shipments is destined for Asian markets, particularly China. Energy experts estimate that about one-fifth of the world’s oil and liquefied natural gas normally passes through the Strait of Hormuz.

Recent data has suggested that traffic through the route has fallen sharply since the escalation of hostilities involving Iran, raising concerns over global energy supply.

War fears and supply risks

Geopolitical tensions have intensified after threats from Iran regarding ships passing through the Strait. Iran’s Revolutionary Guards have warned that vessels moving through the waterway could be targeted, and several ships have reportedly faced attacks since the conflict escalated.

Shipping companies have also faced rising insurance costs, with premiums increasing significantly due to war risks. This has discouraged many vessels from entering the region.

The United States and several other countries are trying to stabilise the situation. US President Donald Trump earlier said Washington could protect oil tankers travelling through the Strait of Hormuz.

European nations and several Asian countries have also discussed the possibility of a joint mission to ensure the safety of shipping routes, although such steps may depend on how the conflict evolves.

Key levels for crude oil

Singhvi said crude oil currently appears to be trading in a broad range of about USD 10. “Below USD 80, crude may start showing fresh weakness. Above USD 95, stress could return to the markets,” he said.

He said prices have repeatedly found support near USD 82 while facing resistance around USD 92–USD 93. According to Singhvi, a decisive move beyond this range will depend largely on geopolitical developments.

If tensions ease or supply routes remain operational, crude prices could correct further, he said. However, if the conflict intensifies or shipping disruptions increase, prices could spike again.

Can crude cross USD 100 again?

Singhvi said the possibility of crude oil moving above USD 100 cannot be ruled out if geopolitical tensions escalate sharply. A prolonged conflict in the region could disrupt oil supplies and push energy prices higher globally.

At the same time, he said a large portion of the current price movement reflects a “war premium” built into crude oil prices. “If the war premium disappears, crude could move back towards the USD 70–USD 80 range,” Singhvi said. He added that many oil-producing nations may also increase production if prices rise sharply, which could limit further upside.

Impact on global markets

Volatility in crude oil has also been reflected in global equity markets. Singhvi said US markets have seen wide swings in recent sessions as investors try to assess the impact of geopolitical developments and energy prices.

The Dow Jones Industrial Average moved within a range of about 750 points during the session before ending lower, while the Nasdaq also saw a range of around 300 points and closed nearly flat.

Singhvi said global markets are currently in a wait-and-watch mode as they track developments in the Middle East and their potential impact on energy supplies and the global economy.

He added that the next major move in crude oil prices will largely depend on whether tensions escalate further or diplomatic efforts help ease the conflict.