Crude Retreats From 22-Month High as Trump Signals Sanctions Relief, Eyeing Reserve Release

Traders' Opinions

Summary:

Oil prices experienced a volatile session, pulling back sharply from a 22-month high above $113 after President Trump signaled potential sanctions relief and hinted at a near-term resolution to the conflict with Iran.

BUY WTI

EXP

TRADING

85.505

Entry Price

110.000

70.800

83.990 -1.022 -1.20%

0.0

Pips

Flat

70.800

Exit Price

85.505

Entry Price

110.000

West Texas Intermediate crude oil navigated a minefield of geopolitical crosscurrents on Tuesday, swinging heavily in and out of positive territory as the market digested a sudden shift in White House rhetoric against the backdrop of the most severe supply disruption in decades.

After surging to a blistering $113.28 per barrel on Monday—a peak not seen since June 2022—the US benchmark retreated to trade near $85.50 during the European session. The pullback was triggered by comments from US President Donald Trump, who signaled a potential de-escalation in the Persian Gulf. Trump stated that the conflict with Iran could be resolved "very soon," adding that he is planning to waive certain oil-related sanctions. The remarks offered a glimmer of relief to a market that has been gripped by fear of a prolonged outage, triggering a wave of profit-taking after the previous session's meteoric rally.

However, the underlying physical reality of the oil market remains dire, suggesting the pullback may be temporary. The Strait of Hormuz, the world's most critical energy artery through which roughly one-fifth of global oil supply flows, remains effectively sealed. With no clear international protocol yet established to secure tanker transit, a logjam of epic proportions is forming.

Sources indicate that major Middle Eastern producers are now being forced to curb production involuntarily. Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq—the heavyweights of the OPEC coalition—have begun throttling back output as onshore storage facilities rapidly reach capacity with nowhere to ship the crude. This de facto supply halt represents a shock to the system far greater than a conventional production cut, removing millions of barrels from the market overnight.

While Trump’s overture regarding sanctions and a potential peace deal applied the brakes to the rally, his administration is concurrently exploring military options to address the immediate crisis. The President noted over the weekend that the US Navy could potentially escort tankers through the strait to force the waterway open and stabilize prices, a high-stakes maneuver that carries the risk of direct confrontation.

Meanwhile, the International Energy Agency (IEA) is scrambling to build a firewall against the price spike. According to reports, the Paris-based agency held emergency discussions with member countries on Monday regarding a coordinated release of strategic petroleum reserves. Such an intervention would inject immediate supply into the tight market, aiming to bridge the gap left by the Hormuz closure and prevent prices from spiraling toward levels that could cripple the global economy.

For now, the market is caught in a tug-of-war between the physical supply collapse happening today and the potential political and strategic relief promised for tomorrow. With the Strait still closed and producers shutting in wells, the risk premium in oil prices remains dangerously high, leaving the commodity susceptible to another explosive move higher should diplomatic efforts falter.

Technical Analysis

From a technical perspective, West Texas Intermediate Crude Oil remains within a broader bullish structure despite the sharp corrective move that followed the recent spike toward the $110 region. On the 4-hour chart, price action shows a strong impulsive rally from the $75 support zone into the $108–$110 area, followed by a swift pullback that has driven prices back toward the mid-range support band near $83–$85. This decline appears corrective rather than trend-reversing, as the broader sequence of higher highs and higher lows remains largely intact.

Currently, prices are attempting to stabilize near the $83–$85 region, which represents an important horizontal support level and a prior breakout area during the latest leg higher. This zone is acting as a demand cluster where buyers may attempt to re-enter the market. As long as crude oil holds above the lower boundary of this region near $82, the broader bullish structure remains viable and suggests the current move is a consolidation phase following the recent volatility.

A decisive break below $82 would represent a meaningful deterioration in near-term market structure. Such a move would expose the next major support zone near $74–$76, which previously acted as a consolidation base before the explosive rally. A sustained move beneath that area would significantly weaken the bullish outlook and signal a deeper corrective phase rather than a normal retracement.

On the upside, bullish traders are focused on the resistance band around $94–$96, which marks the midpoint of the recent selloff and an important supply zone where sellers previously regained control. A successful recovery above this area would indicate renewed bullish momentum and could open the path toward the $105 region, with the $115 resistance zone representing the next major upside objective if momentum accelerates.

Price structure also suggests the possibility of a short-term retracement higher before continuation, as the market attempts to build a higher low within the $83–$85 demand region. If this support continues to hold, a rebound toward the $94 resistance band becomes increasingly likely, aligning with the projected recovery path indicated on the chart.

Overall, the technical outlook favors a recovery scenario as long as the $82 support level remains intact, with the broader trend bias still leaning bullish despite the recent volatility.

TRADE RECOMMENDATION

BUY WTI CRUDE OIL

ENTRY PRICE: 85.50

STOP LOSS: 70.80

TAKE PROFIT: 110.00

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Crude Retreats From 22-Month High as Trump Signals Sanctions Relief, Eyeing Reserve Release

Technical Analysis

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