Fundamental analysis of the oil market indicates that in early autumn, prices will hold within a wide but predictable range—from $80 to $96 per barrel. The key driver determining the direction of movement remains the geopolitical situation in the Middle East. It is this factor, rather than classic market indicators, that currently dictates the rules of the game for traders and investors.
Technical Outlook: Potential for Growth to $96
The recent surge, when the barrel approached the $95 mark, has given way to a profit-taking phase. However, this does not signal a trend reversal. Based on current technical signals and analysis of price levels, a scenario is likely in which August momentum carries over into a September rally. If tensions persist without signs of de-escalation, we could see a test of the $96 level as early as the first half of autumn.
At the same time, if the situation begins to ease, the market will find support at the psychologically important level of $90. This level now acts not just as a number, but as a consensus zone between buyers and sellers, making it critically important for short-term strategies.
Consensus Forecast: Volatility Around $90
A more cautious scenario suggests that there will be no sharp moves, but stability should not be expected either. High uncertainty, especially regarding the Iranian dossier, could trigger events at any moment. Markets have already adapted to this backdrop: inventories in consumer countries are sufficient to offset a temporary supply deficit for several months. This creates a "safety cushion" that keeps prices from collapsing, but not from volatility.
The most realistic baseline scenario is fluctuations within ±10–15% of current values, i.e., around $90 per barrel of Brent. This range appears sustainable provided the current market balance is maintained.
The "War of Attrition" Strategy
Special attention deserves the shift in Washington's tactics toward Iran. The transition to a "war of attrition" strategy reduces the likelihood of an immediate military escalation, but does not rule it out entirely. Tehran has already threatened strikes on ships beyond the Persian Gulf, adding risks to tanker shipments. However, given that the parties' minimum demands do not align and the prospect of a diplomatic solution is extremely slim, oil supply will remain constrained.
It is this factor—suppressed supply—that will keep prices at elevated levels. Global reserves are still managing to smooth out shocks, but their capacity is not unlimited. Under such conditions, I expect oil to remain within the specified corridor, but any unforeseen incident could instantly push prices to the upper end of the range.
My view: the oil market right now is a classic example of trading on a geopolitical premium. As long as the conflict remains in a "frozen" phase, $90–96 is a fair price. But investors should be prepared for any shift in the parties' rhetoric to instantly rewrite these levels.