Rising Hormuz Risks and Technical Reversal Could Drive Oil Prices Above $95 in the Medium Term

Summary:

Geopolitical tensions in the Middle East have escalated once again as the United States resumes maritime blockade measures against Iran, fueling concerns over potential disruptions to global crude oil supplies. With transit risks in the Strait of Hormuz increasing, supply shortage concerns are being repriced into the market, suggesting that WTI crude may maintain a bullish bias.

BUY WTI

EXP

TRADING

79.273

Entry Price

95.800

63.800

79.228 +1.480 +1.90%

0.0

Pips

Flat

63.800

Exit Price

79.273

Entry Price

95.800

Fundamentals

The Middle East has once again become the focal point of the market. The United States announced that it would resume maritime blockade operations against Iran starting at 4:00 a.m. on the 15th and stated that a 20% fee would be imposed on all cargo shipments involving Iran. The blockade applies to all vessels regardless of their flag and covers Iran's entire coastline, including major ports and oil export terminals.

Although the United States stated that it would not interfere with the normal passage of neutral vessels transiting the Strait of Hormuz to or from non-Iranian destinations, and humanitarian shipments would still be permitted following inspections, market concerns over regional security risks have intensified rapidly.

Shipping data showed that the number of oil tankers passing through the Strait of Hormuz over the past 24 hours has fallen to its lowest level in nearly two months. Meanwhile, renewed military exchanges between the United States and Iran, coupled with several recent attacks on commercial vessels, have further heightened concerns regarding the stability of global energy supply chains.

In addition, rising sanctions and transportation risks have slowed Iranian crude sales, prompting some independent Asian refiners to shift purchases toward more competitively priced crude from Iraq, the UAE, and Qatar. The market is reassessing the Middle East's supply risk premium, with geopolitical factors once again becoming a key driver of higher oil prices.

Overall, as geopolitical risks continue to rise, expectations of supply disruptions are strengthening. Crude oil has re-entered a phase of geopolitical risk premium pricing and is likely to maintain a firm tone in both the short and medium term.

Rising Hormuz Risks and Technical Reversal Could Drive Oil Prices Above $95 in the Medium Term_1

Technical Analysis

On the four-hour chart, WTI crude has formed a relatively standard inverse head-and-shoulders reversal pattern. The left and right shoulders have gradually taken shape over the past month, while the recent decisive breakout above the neckline at $72.37 officially confirms that the downtrend in place since May has ended.

Based on the measured move of the inverse head-and-shoulders pattern, the distance from the head near $67 to the neckline at $72.37 projects an upside target around $92, broadly aligning with the key resistance area formed in early June. Should the breakout receive further confirmation, WTI crude could extend gains toward the $95.00-$96.50 region.

In terms of moving averages, although the 100-day moving average remains below the 200-day moving average, the negative divergence between the two has narrowed significantly as prices continue to rebound, indicating the potential formation of a bullish golden cross in the coming weeks. Prices have already reclaimed both medium- and long-term moving averages, which may now serve as dynamic support levels during pullbacks.

Momentum indicators show that the stochastic oscillator has entered overbought territory, reflecting strong buying pressure behind the recent rally, while also signaling the possibility of short-term corrections or consolidation. A pullback toward the neckline support near $72.37 followed by stabilization could provide fresh buying opportunities for bullish investors.

The Relative Strength Index (RSI) is also climbing rapidly and approaching overbought levels, indicating that buyers remain firmly in control. As long as the RSI does not develop a significant bearish divergence, the bullish trend is likely to remain intact.

Nevertheless, investors should remain alert to potential risks. Although market structure has improved considerably, large short positions established around $65.80 have not yet been fully unwound. As prices gradually approach the area above $88.00, profit-taking pressure may begin to emerge. Moreover, there remains the possibility that the United States and Iran could return to the negotiating table. Any easing in geopolitical tensions could lead to a rapid unwinding of the risk premium and limit further upside in oil prices.

Trading Recommendation

Trading Direction: Buy

Entry Price: 78.00

Target Price: 95.80

Stop Loss: 63.80

Valid Until: August 13, 2026, 23:55

Key Support Levels: 77.87, 75.77, 72.65

Key Resistance Levels: 85.37, 88.55, 91.84

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