Oil Bulls Take Control as Hormuz Traffic Remains Restricted

Traders' Opinions

Summary:

WTI extends its rally to around $83.50, nearly 10% above last week’s close, as hopes for a US-Iran peace agreement deteriorate. Severely restricted traffic through the Strait of Hormuz continues to fuel concerns over global energy supplies.

BUY WTI

EXP

TRADING

81.511

Entry Price

90.000

77.000

80.716 -0.696 -0.85%

0.0

Pips

Flat

77.000

Exit Price

81.511

Entry Price

90.000

Oil prices are extending their powerful recovery for a second consecutive session on Tuesday, with West Texas Intermediate (WTI) trading around $83.50 during European hours. The US benchmark has now gained nearly 10% from last week’s closing levels as traders rebuild a substantial geopolitical risk premium amid fading hopes of a US-Iran peace agreement.

The biggest concern remains the Strait of Hormuz. Washington and Tehran have yet to agree on conditions for fully reopening the crucial energy corridor, with both sides reportedly demanding compensation for damages suffered during the conflict. The increasingly complicated negotiations are reducing expectations for a rapid normalization of regional energy flows.

Adding to market concerns, Tehran has restructured its senior military and security leadership with six new appointments. Former IRGC commander Mohsen Rezaee has taken over as Secretary of the Supreme National Security Council, a highly influential position in Iranian foreign policy. His skeptical stance toward negotiations with Washington has added to doubts surrounding the peace process.

More importantly for Oil markets, shipping through Hormuz remains severely restricted. Reuters reported, citing shipping data, that only six vessels crossed the waterway on Monday, compared with 10–11 during recent weeks and roughly 130–160 vessels before the conflict began.

The collapse in traffic through Hormuz is currently more important for WTI than diplomatic rhetoric. As long as shipping remains severely constrained, traders have a fundamental reason to maintain a significant supply-risk premium.

With WTI already approaching $84, further escalation or prolonged disruption could keep upward momentum intact. However, any credible breakthrough between Washington and Tehran capable of restoring normal traffic through Hormuz could trigger an equally aggressive reversal in Oil prices.

Technical Analysis

WTI crude oil continues to show a constructive bullish setup on the 4-hour chart despite the latest pullback from $83.30. The market has staged an impressive recovery from the $74.00 region, and the retreat toward $81.00 now places prices at an important former resistance area that could determine whether the rally has further room to run.

The $80.80–$81.20 zone is particularly important. This area previously acted as a ceiling, and its ability to turn into support would reinforce the bullish shift in market structure. If buyers continue to defend this region, WTI could revisit $83.00 before challenging the more significant $84.00–$84.40 barrier.

A convincing break above $84.40 would clear one of the strongest nearby technical obstacles and potentially pave the way toward $86.00. Beyond that, the psychological $90.00 level becomes a realistic longer-term target if bullish momentum continues to build.

Alternatively, failure to defend $80.80 would suggest that the recent rally is losing momentum. Such a move could send prices back toward $78.00, with a deeper correction bringing $75.50 into focus. The $73.50–$74.00 region remains the major structural floor and would need to break before the broader recovery is seriously compromised.

For now, the balance of risks remains tilted higher. The latest decline appears more consistent with profit-taking and a retest of the breakout area than the beginning of a sustained bearish reversal. As long as WTI remains above $80.80, buyers retain an opportunity to regain control and drive prices toward $84.40, with a breakout potentially extending the recovery toward $90.00.

TRADE RECOMMENDATION

BUY WTI

ENTRY PRICE: $81.50

STOP LOSS: $77.00

TAKE PROFIT: $90.00

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Oil Bulls Take Control as Hormuz Traffic Remains Restricted

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