Geopolitical Risk Spikes: Oil Holds $64 as US Evacuates Iraq Embassy Amid 'Armada' Deployment

Escalating tensions in the Middle East have once again taken center stage in global markets, providing a floor for oil prices and driving safe-haven flows. West Texas Intermediate (WTI) is trading near $64.00, recovering from recent lows, as traders weigh the specter of direct military confrontation against ongoing diplomatic efforts.

Embassy Evacuation and “Invincible Armada”

Reports confirm that the US Embassy in Iraq has initiated an emergency evacuation of staff, a signal often interpreted as a precursor to kinetic action. Compounding the anxiety, President Trump has reportedly deployed a naval strike group—dubbed the “Invincible Armada”—to the region. This “ultimatum” strategy aims to pressure Tehran, though Iranian officials remain defiant.

Despite eight months of sanctions and military strikes, Tehran is negotiating with “surprising confidence,” betting that Washington lacks a clear regime-change strategy and is wary of the domestic political costs of a full-scale war.

Market Reaction & Key Levels

• Crude Oil: WTI has found support around $63.90, with traders hesitant to short the market given the supply disruption risks involved in any Hormuz Strait escalation.
• Safe Havens: Gold remains bid, with massive brokerage order books showing international spot gold continuing its Asian session rally.
• Diplomatic Channels: Negotiations in Oman are viewed as the “final notice,” keeping a cap on immediate panic buying, though the fragile nature of these talks leaves the risk skewed to the downside for risk assets.