By: Razan Hilal, Market Analyst
Brent crude oil is holding in a neutral range after a steep drawdown from the seven-month barrier that had capped its highs. The crude oil risk premium now rests on two geopolitical fronts, U.S.-Iran tensions and Russia-Ukraine attacks on energy infrastructure, and a full unwind requires de-escalation on both. That second front matters because it keeps part of the premium in place even when the U.S.-Iran narrative cools. For crude oil, the path toward deeper support zones on the chart is tied to more than one conflict.
Razan Hilal, CMT, a StoneX Media Market Analyst based in Dubai, brings seven years of market analysis across forex, stocks, commodities and equity indices, with a specialization in technical and intermarket analysis. Her work tracks how price structure in crude oil, Treasury yields and energy equities responds to shifting geopolitical narratives across the Middle East and beyond.
Crude oil's path lower runs through de-escalation on two fronts, the U.S.-Iran standoff and the Russia-Ukraine conflict, where extended attacks have targeted energy infrastructure. According to Hilal, "markets may be approaching a critical technical decision point related to the U.S.-Iran geopolitical narrative", yet the Russia-Ukraine front adds a second layer to the same crude oil risk premium. Hilal frames the drawdown in Brent crude as part of a broader corrective cycle, with Fibonacci extensions marking successive support zones below the market. A move into those deeper zones lines up with the recovery of broader supply routes and de-escalation across both conflicts. Continued strikes on energy infrastructure, in contrast, keep a floor under part of the premium.
A sustained crude oil hold above its previous resistance would extend the escalation phase toward the yearly highs, in line with rate hike expectations across markets. The Energy Select Sector SPDR Fund (XLE) offers a cross-asset check, and shows a pullback from an 18-year resistance line with bearish divergence from multi-year overbought conditions. That pullback points to the broader neutral hold in crude prices, as U.S. 10-year Treasury yields test multi-decade resistance at the same time. Crude oil, yields and energy equities are all sitting at long-term levels together, and the direction they break carries the geopolitical message. "A simultaneous reversal across markets may signal a broader reversal in risk premium, while a sustained breakout above these resistance levels could signal further escalation on the horizon", Hilal says.
--- Written by Frédéric Guétin, StoneX Media Producer
--- Expert: Razan Hilal, StoneX Media Market Analyst
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Crude oil's geopolitical risk premium rests on two fronts, U.S.-Iran tensions and Russia-Ukraine attacks on energy infrastructure. A full unwind in Brent crude requires de-escalation on both, while cross-asset signals from Treasury yields and energy equities show markets holding at long-term levels.
September 28 – Stock futures are pointing to a lower open to start the week, with the Nasdaq and S&P 500 both remaining within shouting distance of their respective all-time highs, while the Dow Jones continues to be the laggard of the major indexes, holding in a clear downtrend after touching a three-plus month low last week. The VIX is elevated to start the week but remains on the low-end of 2026 trade, hovering just above 16 at the time of writing. The dollar is in the green again after big weekly gains but a lower close on Friday, trading at 101.16 to start the day. Treasury yields are looking to start the week in focus as they show signs of renewed upward momentum, as 2-year yields rise to 4.91%, 10-year yields rise to 5.215%, and 30-year yields pushing near 5.53%. Crude oil is higher but the grains and oilseeds are widely lower to start the week as speculative length expresses its disappointment regarding more concrete progress between the U.S. and China.
Oil is more than an energy story for markets watching the Federal Reserve. Its pull on inflation expectations reaches into bond yields, equities and currencies, with the eurozone especially exposed.
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