Brent crude oil price forecast as Polymarket traders see more upside

Brent crude oil price continued its strong rally on Tuesday morning as market participants waited for an update from President Donald Trump on his plans on Iran. It jumped to $111.25, while the West Texas Intermediate (WTI) jumped to $116. 

Donald Trump faces a major test on Iran 

Brent and the West Texas Intermediate oil benchmarks continued rising as Trump's deadline on attacking Iran neared. In a statement on Sunday, he hinted that the US would start destroying Iran’s bridges and power plants at 8:00 ET time today.

He maintained this view in a press conference on Monday, noting that the military was ready to do the bombing, a process that would take about four hours. This statement came a few hours after Iran sent the US a list of ten demands, which the Trump administration views as untenable.

Trump's goal is to use the threats to force the Iranian government to reopen the Strait of Hormuz, which it is using as leverage. A bombing of these critical infrastructures would lead to a major escalation that would work counter to Trump's goal of lowering oil prices.

For one, Iran has warned that it will respond in kind to these attacks. It will bomb the civilian infrastructure of key neighboring countries, including Kuwait and the United Arab Emirates. 

It will also bomb crucial infrastructure projects in Israel, which is the most aggressive country in its attacks. Israel's goal in this war is to leave Iran as a failed state and possibly having regime change.

A widespread attack between Iran, US, and Israel will have major impacts on the energy market because it will mean that traffic through the Strait of Hormuz will remain low this year. There is also a risk that Yemen's Ansah Allah, commonly known as Houthis, will blockade traffic from the Red Sea, which accounts for 12% of the total supply.

On the positive side, Trump is known to change his mind as he did previously when he issued the threat to attack Iran's infrastructure. Both times, he said that Iran had called for talks, which, according to him, were going very well. Iran rejected this claim.

Trump is also likely listening to many advisors who are advising him against attacking civilian infrastructure, which is a war crime. 

One of his options is to just declare victory and leave, citing his achievements, including “regime change”, destroying Iran's military, and damaging key equipment. He would then leave other countries to work on reopening the Strait of Hormuz. Also, he may announce a 45-day ceasefire that countries like Pakistan and Egypt have suggested.

Traders on Kalshi and Polymarket believe that Brent crude oil will continue rising in the near term. For example, a Polymarket poll estimates that the West Texas Intermediate will jump to $120. 

Brent crude oil price technical analysis

Crude oil price chart | Source: TradingView 

The three-day chart shows that Brent crude oil prices have jumped sharply in the past few months. It soared from the double-bottom point at $58.65.

Brent also rebounded after forming a giant falling wedge pattern, which is a common bullish reversal sign in technical analysis. It has remained above the 50-day and 100-day Exponential Moving Averages (EMA).

Also, oil has formed a three white soldiers pattern, which happens when three bullish candles follow each other.

Therefore, the most likely forecast is where it continues rising in the near term, with the initial target being the year-to-date high of $119. A move above that level will point to more gains, potentially to $125.