On Monday, the oil market experienced its most powerful surge in volatility. The benchmark Brent crude made a sharp leap of nearly 11%, reaching $83.31 per barrel. This aggressive rebound from the support zone of $71–$73 was the most significant since the escalation of the conflict between the US and Iran began in late February.
The catalyst for the rally was new strikes between Washington and Tehran, as well as the White House's ambitious plans to take direct control of the Strait of Hormuz. In peacetime, about a fifth of all global oil trade passes through this strategic corridor. The situation has reached a boiling point: US military forces carried out hundreds of strikes on Iranian targets, and in response, Tehran launched missiles and drones at US targets in the region. Iranian authorities again declared the strait closed, warning vessels against deviating from permitted routes.
Shipping data is already recording a collapse. Over 12 hours on Sunday, only nine vessels managed to cross the strait, whereas before the start of military operations, the average daily number of transits was close to 130. Markets are reacting in different directions: Japanese stocks lost 82 trillion yen over three weeks, and the Nikkei 225 index fell nearly 2% on Monday. For oil contracts, however, the reassessment of risks resulted in a sharp rise.
Technical Analysis: RSI Breaks Resistance
The daily Relative Strength Index (RSI) for Brent has risen to the 55 mark, consolidating above the neutral level of 50. This is a critical signal: initiative has shifted to buyers. Previously, the price recovery was held back by a descending resistance line formed after the March RSI peak at 90. Sellers stopped the rally three times — in May at levels 64 and 58, and in June at 46.
At the end of June, the momentum indicator dropped to 27, nearly entering oversold territory. However, in early July, the RSI finally broke above the descending trend and moved above the neutral zone, confirming the breakout. The signal will only turn bearish if the RSI falls back below 50 and breaks the line from below. Until this happens, momentum supports the recovery that began from the July low.
Forecast: Key Level $90–$92
From February to May, Brent moved within a large symmetrical triangle, connecting a high around $118 and a low near $91. At the end of May, the price broke out of the triangle to the downside and by early July had fallen to the support zone of $71–$73. This zone held: buyers built a base there over two weeks, and Monday's session allowed the price to surge higher. Brent opened near $78 and reached a high of $83.54 during the day — a gain of 10.76%.
The next major resistance lies in the area of $90–$92. In the spring, this zone acted as support for the triangle, and now it has become a key confirmation of the downside breakout. If sellers become active here again, it will confirm the bearish scenario, and the price could return to $71–$73. If Brent closes a day above $92, it will cancel the downside breakout and restore the bullish sentiment from the start of the year.
My expert opinion: The geopolitical premium in the price will persist as long as Iran maintains tension in the strait. The range of $90–$92 will be decisive for the current recovery: whether Monday's surge is a reversal or another lower high. Given the sharp reduction in shipping, the risks of supply disruptions are real, and the market will price them in until there is clarity on control of the strait.