On Monday, the oil market experienced its most powerful shock since the escalation between the US and Iran began in late February. The price of Brent (UKOIL) surged nearly 11%, reaching $83.31. This surge was one of the most impressive in recent months, triggered not just by geopolitical tensions, but by specific actions from Washington.
Control of the Strait: Geopolitical Premium Returns
American forces carried out hundreds of strikes on Iranian targets in the region, with several dozen more on Sunday. The official goal is to weaken Tehran's ability to attack vessels in the Strait of Hormuz. Iran's response was swift: missiles and drones were launched toward American targets, and the strait itself was again declared closed to ships deviating from permitted routes. Approximately one-fifth of the world's seaborne oil trade passes through this corridor, and any blockade is a direct blow to global supplies.
Shipping data already shows a collapse. In the 12 hours of Sunday, only nine vessels managed to transit the strait, whereas before the hostilities began, the average daily number of transits approached 130. The market instantly reassessed the risks.
Technical Analysis: RSI Breaks Resistance
From a technical perspective, the daily RSI for Brent has risen to the 55 mark and consolidated above the neutral level of 50, which is a strong bullish signal. Previously, the momentum indicator had failed three times to overcome the descending resistance line formed after the March peak at 90. At the end of June, the RSI dropped to 27, indicating an oversold zone. Now, a breakout has occurred, and the initiative has shifted to buyers.
Brent Forecast: $90–$92 as Key Level
From February to May, Brent moved within a large symmetrical triangle, connecting a high near $118 and a low around $91. At the end of May, the price broke out of the triangle downward and fell to support at $71–$73 by early July. This zone held, and Monday's surge allowed the price to rise above $83.
The next significant resistance lies in the $90–$92 area. In the spring, this zone acted as triangle support, and it has now become a key confirmation of the downward breakout. If sellers become active again here, the bearish scenario will be confirmed, and the price could return to $71–$73. However, if Brent closes the day above $92, it would cancel the breakout and restore the bullish sentiment from the start of the year.
My analysis: The geopolitical premium in oil prices is likely to persist as long as Iran maintains tensions in the Strait of Hormuz. The $90–$92 range will be decisive for the current recovery: whether Monday's surge is a reversal or another lower high will be shown in the near future.