Geopolitics and Crude: Why WTI pulled back despite escalating Middle East risks

• WTI crude oil pulled back from $75/barrel highs, with markets seemingly content that the geopolitical risk premium is priced in.
• The Middle East conflict has surged natural gas prices (due to the Qatar LNG halt), boosted shipping/energy stocks, but weighed on airline stocks.
• Key WTI technical levels to watch are resistance at $71.38 and support at $67.00.

Most Read: Markets Today: Chaos as Middle East conflict widens, natural gas jumps 22%, DXY at five-week highs & FTSE 100 retreats

Oil prices have pulled back significantly from the daily highs printed in the Asian session, with WTI reaching a peak around the $75/barrel mark.

The question for some though, are markets pricing enough of a premium given the geopolitics in the Middle East and potential supply disruptions if the conflict continues? Some say no while others are more optimistic.

Oil prices may not have moved as much as some have predicted, but the Middle East conflict is having an impact on a wide range of assets and markets.

The escalating conflict has paralyzed energy production and shipping throughout the Middle East, most notably in the Strait of Hormuz, which facilitates approximately one-fifth of the world’s oil supply.

In a significant move, Qatar suspended all liquefied natural gas (LNG) production at its major facilities, including Ras Laffan, following drone attacks. Because Qatar accounts for roughly 20% of the global LNG market, this halt has triggered a massive surge in natural gas prices, with European benchmarks jumping as much as 50% in a single day.

Global energy equities have surged in response to the supply shock and the 8% spike in crude oil prices. Major players like Exxon Mobil and Shell saw notable gains, with Exxon's share price rising over 4% in early trading. Domestic natural gas firms in the US also benefited from the tightening global market; shares of CNX Resources and Williams Companies each rose by more than 1%, while the United States Natural Gas Fund (UNG) climbed 3.7%.

The aviation and travel sectors faced significant headwinds as the closure of major Middle Eastern hubs triggered a sharp sell-off in airline stocks. Shares of Ryanair, IAG, American Airlines, and United Airlines all retreated, reflected by a nearly 3% drop in the S&P 1500 Passenger Airlines index. This downturn was compounded by the surge in crude oil prices, which typically signals a spike in jet fuel costs—historically one of the industry's heaviest operating expenses.

In contrast, shipping and tanker companies saw their valuations climb as the conflict disrupted vital maritime arteries like the Suez Canal and the Strait of Hormuz. These bottlenecks have tightened global shipping capacity, fueling expectations for significantly higher freight rates. European giants Maersk and Hapag-Lloyd saw their shares jump 7.8% and 6.7%, respectively, while US-based Nordic American Tankers rose over 3%.

Other key players in the sector, including Teekay Tankers and International Seaways, also posted gains as the market braced for a prolonged period of logistical constraints.

The geopolitical situation in the Middle East remains volatile, with the threat of Iranian retaliation against neighboring Gulf states heightening risks to global energy supplies and leaving the door open for further escalation.

While the Strait of Hormuz has not been officially closed by Iranian forces, the commercial impact is already severe; insurers are canceling coverage and shipping premiums are skyrocketing, forcing vessels to either pause transits or seek costly detours.

These disruptions extend beyond maritime trade, as the closure of Gulf airspace is currently severing vital aviation corridors between Europe and Asia. Furthermore, the potential reactivation of Houthi rebels in the Red Sea threatens to shut down the primary alternative routes that previously mitigated Hormuz-related tensions.In the event of a prolonged conflict, the global economy faces a "perfect storm" of compounding pressures.

The synergy of surging energy costs, logistical breakdowns, and a widespread shock to investor confidence poses a significant threat to global trade volumes. This instability arrives at an especially precarious moment, as the world economy is still struggling to absorb the inflationary and growth-stifling effects of recent tariff shocks.

Ultimately, the timing of this crisis could not be worse, potentially stalling a global recovery that was already on shaky ground.

WTI Crude Oil Four-Hour Chart, March 2, 2026

Looking at the four-hour WTI chart above and you can see the massive spike last night at the open.

Oil prices have since failed to surpass the 73.35 handle as markets appear content that enough risk premium has already been priced in.

Support rests some distance away, around the 67.00 handle.

If oil prices remain below the 71.38 resistance level, a return to the 67.00 breakout level cannot be ruled out.

A four-hour candle close back above the 71.38 handle could open up a retest of Sunday evenings highs at the 75.00 a barrel mark.

For now though, staying nimble appears to be the best option as market sentiment can shift in a second.

Keep an eye on developments in the Middle East as well as comments from the Trump administration in the US.

Key levels to keep an eye on

Support:

• 67.00
• 66.15
• 65.00 (100-day MA)

Resistance:

• 71.38
• 73.35
• 75.00

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