WTI Crude Oil: Geopolitical pressure and wave three momentum

Fueling the bullish fire

Oil markets have surged recently, driven largely by escalating tensions between Israel and Iran. With direct military action and threats to key infrastructure, the risk premium has returned in full force:

• Strait of Hormuz threat: Iran has hinted at disrupting this vital oil route.
• Israeli strikes on Iranian energy/nuclear assets raised fears of wider conflict.
• Global oil flow concerns: A potential squeeze in supply is keeping traders on edge.
• Market reaction: WTI surged past $72 on fear-driven buying and safe-haven flows.

While physical supply hasn't yet been disrupted in a major way, the possibility alone is enough to keep bulls in control—for now.

Elliott Wave points to a wave ((iv)) pause

We're tracking a clean impulsive structure in WTIUSD. Price has broken out of its channel and looks to be in the middle of a larger wave 3. However, there are signs we might be stalling inside wave ((iv)) of 3 before one more leg up.

Here’s how it’s shaping up:

• Price impulsed out of the blue channel, clearly entering wave (iii) of 3.
• Now we’re seeing a potential pause or consolidation, suggesting we’re in wave ((iv)).
• The correction could take the form of a triangle or flat, both common in this position.
• Once complete, we expect wave ((v)) of 3 to push toward new highs—possibly into the $78–$82 area.

This aligns well with the geopolitical risk premium we're seeing in oil markets. When technicals and fundamentals align like this, bulls tend to stay in charge—at least until wave 3 exhausts.