Oil Prices Surge as Strait of Hormuz Closure Deepens Supply Fears

Traders' Opinions

Summary:

Oil prices surged above $84 a barrel on Monday as the conflict between the United States and Iran intensified, fueling fears of a wider regional war and prolonging the closure of the Strait of Hormuz.

BUY WTI

EXP

PENDING

80.000

Entry Price

94.000

75.000

82.123 -0.110 -0.13%

Pips

PENDING

75.000

Exit Price

80.000

Entry Price

94.000

Oil prices extended their rally on Monday as the conflict between the United States and Iran intensified, raising fears of a broader regional war and keeping the Strait of Hormuz closed to commercial shipping. West Texas Intermediate (WTI) surged above $84.00 before easing slightly to trade around $83.70.

Market sentiment remains dominated by supply concerns after US forces carried out strikes inside Iran for a ninth consecutive day, following the deaths of additional American troops in attacks blamed on Tehran-backed forces. The escalating military confrontation has heightened fears of a prolonged disruption to global energy supplies.

The Strait of Hormuz remains shut, while British maritime authorities reported a vessel ablaze off the coast of Oman. Iran's Islamic Revolutionary Guard Corps (IRGC) warned that "not a single drop" of oil would pass through the strategic waterway while US military operations continue, further fueling concerns over global crude supply.

WTI has now recovered roughly half of the losses recorded after May's ceasefire agreement. Prices are trading more than 23% above the lows recorded earlier this month, as geopolitical risk continues to underpin the oil market despite remaining well below the March peak of $113.28.

Technical Analysis

WTI crude oil has shifted into a more constructive bullish structure after breaking above the descending channel that had governed price action since May. On the 4-hour chart, prices have reclaimed the former resistance area around $77.50–$78.50 and are now consolidating near $80.00, suggesting that buyers are attempting to turn the recent breakout into a more durable trend reversal. While the pullback from the recent spike toward $84.00 has limited immediate follow-through, it has not materially damaged the broader recovery as long as price remains above the reclaimed support zone.

The $77.50–$78.50 region now represents the most important near-term floor. A decisive break below this area, particularly if followed by a sustained move back beneath the former channel boundary near $75.00, would weaken the bullish setup and raise the risk of a deeper correction toward $72.00–$73.00. A sustained move below that region would suggest that the breakout was false and could expose the $68.00–$70.00 zone, where the latest recovery originally began.

On the upside, bullish traders remain focused on a clean break above the recent swing high around $84.00. A sustained push through this barrier would likely revive momentum buying and shift attention toward the next major resistance zone around $93.50–$94.50, which aligns with the projected move shown on the chart and an earlier area of heavy selling pressure. Clearing that region would mark a more significant change in the medium-term trend and could place the psychological $100.00 level back into focus.

Momentum indicators suggest the market is consolidating after a strong impulsive advance rather than entering a full reversal. The Relative Strength Index (RSI) is likely easing from overbought territory while remaining above the neutral 50 level, showing that bullish pressure has cooled but not disappeared. Meanwhile, the Moving Average Convergence Divergence (MACD) is likely still above the zero line, although flattening momentum would support expectations for short-term sideways movement before the next directional break.

TRADE RECOMMENDATION

BUY WTI CRUDE OIL

ENTRY PRICE: $81.50

STOP LOSS: $75.00

TAKE PROFIT: $94.00

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