WTI, Brent Crude Prices Up Above $75/Bbl, $82/Bbl; A sharp geopolitical risk premium injected into energy markets
Kaynat Chainwala,
AVP Commodity Research,
Kotak Securities
Mumbai, March 2, 2026: Heightened geopolitical tensions in the Middle East pushed precious metals sharply higher, with COMEX gold rising over 3% to $5,409.7 per ounce and silver gaining more than 4% to $97.3 per ounce, both marking fresh one-month highs. Investor sentiment turned defensive after coordinated U.S. and Israeli strikes on Iran over the weekend triggered a broad retaliatory response from Tehran. Iranian strikes reportedly targeted Israel, U.S. military assets, and strategic sites across Saudi Arabia, Qatar, the United Arab Emirates, Kuwait, and Bahrain.
Safe-haven demand had already been building on Friday after China and the United States issued evacuation advisories urging their citizens to leave Iran and Israel, reflecting growing concern over the expanding conflict.
Looking ahead, bullion is likely to remain supported as Trump indicated that military operations could extend for “four to five weeks.” He also suggested that sanctions relief may be possible if Iran’s new leadership signals a willingness to engage constructively while Iran's Supreme National Security Council Secretary Ali Larijani denied Monday any intent to restart U.S. talks, signaling no near-term dialogue. The strong rally indicates that a significant portion of the geopolitical premium may already be priced in. A decisive breakout to new highs would likely require a major escalation, for instance, a confirmed large-scale Iranian attack on a U.S. aircraft carrier such as the USS Abraham Lincoln, which could provoke substantial U.S. retaliation and ignite another wave of aggressive safe-haven buying.
Today, WTI and Brent crude prices briefly surged above $75/bbl and $82/bbl, respectively, their highest levels since June and January 2025, in a sharp knee-jerk reaction on Monday amid Iran retaliatory strikes across the Middle East in response to ongoing military action by the U.S. and Israel, further amplifying fears of regional supply instability. The situation turned increasingly volatile following the reported death of Iranian Supreme Leader Ayatollah Ali Khamenei. Reports of attacks on at least three vessels near the Strait of Hormuz, significantly impacted tanker traffic through the critical waterway. Iran has reportedly warned ships against transiting the Strait, which handles nearly 20% of global oil and gas flows, leading to a precautionary pause by several shipowners and traders as the conflict continues to escalate.
However, crude prices have since retreated from their highs, with WTI and Brent slipping below $72/bbl and $79/bbl, respectively, as traders reassess the actual risk to physical supply. A sustained upside in prices would likely materialize only if oil flows through the Strait of Hormuz remain disrupted for an extended period, potentially 4–5 weeks as per President Trump's campaign. While OPEC+ has announced plans to increase output by 206,000 barrels per day starting in April to cushion potential disruptions, additional production cannot fully offset the impact of a closure or severe restriction at a chokepoint that handles one-fifth of global energy trade. If the traffic on the strait improves, price spikes may prove temporary; if it does not, the supply shock could be significantly more pronounced.
Apurva Sheth, Head of Market Perspectives & Research, SAMCO Securities, adds:
Crude has played out exactly as anticipated. The breakout above $66 unfolded swiftly, with prices surging toward $70 and beyond after the US-Israel strike on Iran injected a sharp geopolitical risk premium into energy markets. This rally confirms our broader commodity supercycle framework… once precious metals and base metals lead, energy typically joins the move.
● However, markets are forward looking mechanisms. The spike now brings crude closer to the previous major swing high near $77.65… a level that capped prices in the prior cycle. That zone is likely to act as a strong medium term resistance.
● Geopolitical events often create emotional price extensions. Once the news is fully priced in, volatility cools and risk premiums compress. In trading parlance… buy on rumour, sell on news. Counter intuitive, but historically accurate.
● With crude already reacting sharply to the conflict narrative, the probability of consolidation or cooling off has increased. Momentum traders should avoid chasing strength here. A healthy pullback toward prior breakout zones would offer a structurally better risk reward setup.
● In supercycles, patience compounds returns more than excitement does.
