Oil Jumps 3.5% as Hormuz Supply Fears Return

Traders' Opinions

Summary:

WTI surged nearly 3.5% to $94.60 after the US rejected Iran's ceasefire proposal. Reduced Hormuz flows and stalled diplomacy have brought supply risks back into focus.

BUY WTI

EXP

TRADING

94.672

Entry Price

101.000

90.500

93.268 +1.949 +2.13%

0.0

Pips

Flat

90.500

Exit Price

94.672

Entry Price

101.000

Oil prices climbed sharply on Monday as hopes for a near-term easing of tensions between the United States and Iran faded, putting supply risks surrounding the Strait of Hormuz firmly back into focus. West Texas Intermediate (WTI) rose nearly 3.5% to around $94.60 per barrel, reversing part of its recent decline.

The renewed buying followed US President Donald Trump's rejection of Tehran's proposal for a seven-day ceasefire and the reopening of the Strait of Hormuz. Trump maintained that the US was gaining the upper hand in the conflict and indicated that attacks against Iran could resume following the US midterm elections.

The breakdown in diplomacy is particularly important for Oil because the Strait of Hormuz remains operating well below its normal capacity. Kpler data showed crude flows through the waterway increased to 12.8 million barrels per day in September, the strongest since the war began on February 28. However, that remains substantially below the roughly 20 million barrels per day that passed through Hormuz before the conflict.

The improvement in traffic has therefore provided only limited reassurance. With millions of barrels of daily supply still missing compared with pre-war conditions, any further escalation could quickly tighten global energy markets.

Iran has also maintained a hard line over the strategic waterway. Foreign Minister Abbas Araghchi said Tehran remains willing to pursue genuine diplomacy while simultaneously warning that the country is prepared for an extreme confrontation with Washington. Iranian military officials have also claimed complete control over the Strait of Hormuz, reinforcing uncertainty over future shipping conditions.

Tehran has shown little willingness to soften the conditions attached to reopening the Strait. Its demands continue to include sanctions relief, access to frozen Iranian assets and an end to US blockade measures.

Deutsche Bank also sees little evidence that negotiations are close to producing a breakthrough. Although another round of US-Iran discussions could take place this week, the lack of progress over the weekend has already contributed to renewed upward pressure on both Oil prices and bond yields.

For WTI, the latest move suggests that the geopolitical premium is returning after briefly easing on hopes of diplomacy. As long as Hormuz traffic remains well below pre-war levels and Washington and Tehran remain divided, Oil could retain an upward bias, with $100 returning as the next major psychological target if tensions intensify.

Technical Analysis

WTI is showing renewed bullish momentum on the 4-hour chart, rebounding strongly from the $90.00–$90.50 support region and climbing back toward the important $94.00–$94.70 resistance zone. The recovery has produced a sequence of higher lows, suggesting buyers are gradually regaining control following the earlier decline from above $101.

The immediate focus is now on the resistance area around $94.00–$94.70. This zone previously acted as support before the September breakdown and has since become a significant technical barrier. A decisive 4-hour close above this region would strengthen the bullish structure and could open the door toward the next resistance around $97.70–$98.20.

A successful breakout there would significantly improve the broader outlook, exposing the psychological $100.00 level, followed by the major supply zone around $100.50–$101.50. The projected structure on the chart suggests that a brief retest following a breakout would not necessarily invalidate the bullish scenario, provided buyers continue defending the $94 area.

On the downside, failure to overcome current resistance could trigger another pullback toward $90.00–$90.50, which remains the key near-term support. A sustained break beneath that area would weaken the recovery and expose the deeper support region around $85.50–$86.20.

Overall, WTI's short-term structure is turning increasingly bullish, but confirmation depends on a clean break above $94.70. If buyers secure that breakout and convert the current resistance into support, the technical path toward $98 and eventually $100–$101 becomes considerably clearer.

TRADE RECOMMENDATION

BUY WTI

ENTRY PRICE: 94.70

STOP LOSS: 90.50

TAKE PROFIT: 101.00

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Oil Jumps 3.5% as Hormuz Supply Fears Return

Technical Analysis

Risk Disclosure