Another shocking Monday for the energy market. Last week’s start was remembered for a bullish gap of more than 10% (which was later followed by a pullback), but today’s market open proved even more volatile (as reflected by the ATR indicator). After a bullish gap of roughly 11%, the price continued to climb, reaching a peak of around $114 per barrel of WTI during the Asian session. This is the highest price since 2022.

The drivers of the rally are obvious – the escalation of the war in the Middle East, with more countries becoming involved. Risks have reached a critical point, with discussions emerging around the scenario of a complete blockade of shipping through the Strait of Hormuz. In such a case, oil-producing countries could invoke force majeure as grounds for halting supplies.

Technical Analysis of the XTI/USD Chart

Analysing the oil price chart a week ago, we assumed that the $70 level would act as support. Indeed, the market remained above this psychological level, while rising highs and lows reflected traders’ concerns.

Extreme volatility must be taken into account when applying classical technical patterns. Today, the oil price chart allows us to draw a broad ascending channel with a steep slope. In this context, it is worth noting (as indicated by the arrows):

→ the rapid rise in oil prices within the upper quarter of the channel;
→ the subsequent reversal and a swift decline towards the median.

This price action (essentially resembling a Bearish Engulfing pattern) points to a sharp shift in sentiment.

From the bulls’ perspective → the median of the wide channel, reinforced by the psychological $100 level, may act as support.

However, judging by the extremely wide candle, during which the XTI/USD quote dropped from $111 to $100 today, it is reasonable to assume that the initiative currently lies with the bears. And even if a rebound from the median occurs, it may fade near the $105 level (which has already acted as resistance on lower timeframes).

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TLDR:

• Japan holds the world’s third-largest petroleum reserves, covering roughly 254 days of domestic consumption needs.
  
• Over 90% of Japan’s crude oil imports pass through the Strait of Hormuz, raising serious energy security concerns.
  
• Brent crude briefly surged near $120 per barrel, marking one of the sharpest oil price spikes seen in decades.
  
• Governments discussing strategic reserve releases signal preparations for a broader, potentially global energy supply shock.

Japan’s strategic oil reserves have become a focal point amid escalating Middle East tensions. Tokyo has denied making any final decision on releasing emergency petroleum stockpiles.

Reports earlier suggested Japan was preparing to tap its reserves. Officials say the government is closely monitoring developments before acting. Brent crude briefly surged near $120 per barrel.

This marks one of the sharpest price increases in recent decades. Global energy markets remain on edge.

Japan Monitors Middle East Crisis as Oil Prices Surge

Japan’s government confirmed no final call has been made on releasing strategic petroleum. Officials stated Tokyo is actively watching the Middle East conflict before committing to action.

The situation remains fluid, and energy markets are reacting accordingly. Any formal decision would carry major weight given Japan’s deep crude oil dependency.

Crypto and markets analyst Coin Bureau noted the broader context on social media. The account referenced past crises, including the 1990 Gulf War and the 2011 Fukushima disaster.

Both events prompted emergency energy responses across major economies. This context places the current situation in serious historical company.

Brent crude briefly touched near $120 per barrel amid growing uncertainty. That price level represents one of the largest spikes seen in decades.

Energy traders are pricing in potential supply disruptions stemming from the region. Market volatility is expected to continue as long as regional tensions persist.

Japan holds the world’s third-largest petroleum reserves, behind the United States and China. Its emergency stockpiles cover approximately 254 days of domestic consumption.

Releasing those barrels could help stabilize global supply chains considerably. It could also bring some measured relief to volatile crude prices worldwide.

Strait of Hormuz Disruption Puts Japan’s Energy Security at Risk

The Strait of Hormuz remains central to this rapidly developing energy story. Roughly 20% of the world’s oil supply passes through this single waterway.

Any disruption there would send strong shockwaves through global energy markets. Japan stands among the most exposed nations to such a supply scenario.

More than 90% of Japan’s crude oil imports travel through the Strait of Hormuz. This makes the country particularly sensitive to any blockage or regional conflict.

Strategic reserves exist precisely to buffer economies against sudden supply shocks. Their potential use shows how seriously Tokyo views the current threat.

As Coin Bureau posted: “Even discussing a release tells you something — Governments are preparing for a potential GLOBAL energy shock.” Governments that discuss reserve releases are typically preparing for a broader disruption.

This pattern has held true across several major historical energy crises. The current conversation around Japan’s reserves follows that same well-established logic.

For now, Tokyo maintains a cautious, wait-and-watch stance on the matter. However, if the Hormuz disruption worsens, strategic reserves may become essential.

Japan’s response could set the tone for other energy-dependent nations watching closely. The coming days will determine how far this energy crisis escalates.

Bitcoin (BTC) displayed strength as it traded above $67,000 on Monday, after producing the first bullish weekly close in seven weeks. Meanwhile, oil prices exploded as the Middle East conflict prompted fears of a major supply shortage.

Key takeaways:

• Bitcoin holds firm above $67,000 as oil prices surge to the highest level since 2022.

• The biggest oil supply shock in history triggers global inflation worries.

• A bullish inverted hammer on the weekly chart suggests a potential BTC bottom.

Global oil supply shock sparks inflation worries

Data from TradingView showed oil futures rose to $119 during early Asian trading hours on Monday, as the escalating Middle East conflict raised fears of supply disruptions.

This is the highest price oil has reached since Russia invaded Ukraine in 2022.

The latest surge in oil prices came as Iraq warned that roughly 3 million barrels per day of production could be disrupted due to Iranian threats against tankers in the Strait of Hormuz.

Related: Bitcoin preps fresh trend line showdown as weekly close sparks $60K target

Capital markets commentator The Kobeissi Letter said the world is now experiencing the “largest oil supply shock in history,” losing nearly 20 million barrels of oil supply daily.

Despite the exploding oil prices, US President Donald Trump said it’s a “small price” to pay for peace.

“Short-term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and world, safety and peace.”

Meanwhile, the sharp rise in oil prices and the imminent supply shock have revived global inflation concerns, with markets seeing few chances of rate cuts in 2026.

Polymarket bettors are pricing in a roughly 99% probability that the Federal Reserve leaves rates unchanged at its March 18 meeting, with only about a 27% chance of a 25-basis-point cut in 2026.

Leaving rates unchanged tightens financial conditions, boosts the dollar, and pressures Bitcoin, which often sees short-term volatility as investors rotate capital into safe havens like gold.

Has Bitcoin price already bottomed?

At the time of writing, Bitcoin traded around $67,000 with little sign of panic selling, suggesting that traders treated the spike as an energy-specific shock rather than a broad risk-off event.

“Bitcoin’s refusal to go down when the rest of the market is burning is one of the strongest indications I’ve seen yet that the bottom could be in,” analyst Brian Brookshire said in an X post on Monday, adding:

“If there were even the slightest hint of froth in Bitcoin, it would have panic-sold off 10% into the futures open.”

Despite being rejected from the $74,000 resistance level, the BTC/USD pair still produced the “first positive weekly candle in 7 weeks,” founder and CEO at CoinBureau Nic said on Monday.

The price action has also formed an “inverted hammer, which could indicate a potential bullish reversal,” Nic added.

An inverted hammer weekly candle is a bullish reversal pattern found at the end of a downtrend. It features a small body at the lower end, little to no lower wick, and a long upper wick at least twice the size of the body. It signals that buyers are challenging sellers, potentially reversing the trend.

Thus, Bitcoin could move higher if this pattern is confirmed by a strong bullish follow-through candle this week, with higher volume to break overhead resistance.

As Cointelegraph reported, spikes in oil prices immediately after conflicts tend to be short-lived, with Bitcoin outperforming over the longer term.