Middle East Turmoil Threatens Global Supply Chains

June 21, 2025 stocks24

KUALA LUMPUR, MALAYSIA – Media OutReach Newswire – 21 June 2025 – Crude oil, often seen as the most essential commodity globally, is currently under intense scrutiny. The escalating turmoil in the Middle East raises the stakes for a potential oil supply crisis, which could send ‘black gold’ prices soaring and threaten the global economy. In this piece, Octa, an international retail broker, shares insights into the evolving situation and explores possible scenarios for the global oil market.

As usual, the market has started to consider the likelihood of a new conflict in the Middle East well in advance. On 11 June, oil prices jumped over 4% following news that the U.S. was planning to evacuate its embassy in Iraq due to heightened security threats. Just two days later, airstrikes between Israel and Iran pushed both Brent and West Texas Intermediate (WTI), the two foremost oil benchmarks, to five-month highs as traders prepared for possible supply disruptions arising from the conflict. Currently, the unrest continues without resolution, keeping oil prices elevated, though there are signs that negotiations might be forthcoming.

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‘This mounting instability creates an unprecedented volatility level, raising the likelihood of a disastrous oil supply shock’, states Kar Yong Ang, a financial market analyst at Octa broker, emphasizing that the ongoing conflict between Israel and Iran ‘holds the unsettling potential to drive crude prices to all-time highs, triggering a series of negative repercussions that, in the worst-case scenario, could evoke a major global economic crisis’.

Indeed, the Middle East, particularly Iran, plays a pivotal role in the global energy landscape. A substantial amount of the world’s crude oil and liquefied natural gas (LNG) is produced and exported from this region. Despite existing export sanctions, Iran remains a significant oil supplier—especially to China. Moreover, many tankers transporting crude oil and LNG navigate through the Strait of Hormuz, a crucial chokepoint that Iran has often threatened to close. Should Iran act on this threat and block the strait, the results could be dire, potentially sending global crude oil prices soaring above $100 per barrel due to severe supply constraints.

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Analyzing from a technical perspective, looking at the broader, long-term trend, WTI crude oil appears to be moving laterally with a slight bearish inclination. A review of the daily chart (see below) indicates that the price is confined within a bearish parallel channel. However, recent geopolitical developments have allowed the price to rise above the 200-day moving average (MA) and seem poised to challenge the critical 77.60-78.00 zone.

‘Surpassing the $80 threshold is plausible if the situation intensifies significantly’, remarks Kar Yong Ang. ‘The ongoing damage to oil infrastructure in Iran, potential U.S. participation in the conflict, and hesitation from other nations to pursue negotiations—especially in light of Iran’s threats to obstruct the Strait of Hormuz—will all contribute bullish pressure on prices’. A breach of the $80 level would likely lead to targets of 83.40, 85.20, 87.30, and 90.00.

Conversely, should hostilities diminish, and there’s a lack of direct U.S. involvement, in conjunction with Israel and Iran showing a willingness to negotiate, bearish sentiment could quickly take effect. ‘I anticipate WTI oil could drop by as much as $5 per barrel almost instantly if we observe any progress in the nuclear discussions between European countries and Iran, which are set to begin in Geneva this Friday’, concludes Kar Yong Ang. In this scenario, a fall below the 71.50 level would enable bears to target 67.80, 64.80, and 61.70.

Octa

Octa is a global CFD broker that has been providing online trading services since 2011. It offers commission-free access to financial markets and various services utilized by clients from 180 countries who have opened over 52 million trading accounts. To assist clients in reaching their investment goals, Octa offers free educational webinars, articles, and analytical tools.

The company also engages in diverse charitable and humanitarian initiatives, including enhancing educational infrastructure and funding emergency relief projects to support local communities.

In Southeast Asia, Octa earned the ‘Best Trading Platform Malaysia 2024’ and the ‘Most Reliable Broker Asia 2023’ accolades from Brands and Business Magazine and International Global Forex Awards, respectively.

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