Monday marked a day of powerful rallying in the oil market. The benchmark Brent crude (UKOIL) surged nearly 11%, reaching $83.31 per barrel. This surge is one of the most impressive since the escalation of the US-Iranian confrontation in late February. The price bounced off the key support zone of $71–$73, and now a fundamentally new picture is opening up before us.
The reason for such a sharp move is not just rumors, but concrete military actions. US military forces carried out hundreds of strikes on Iranian targets, with several dozen more on Sunday. The official objective, as stated by the US Central Command, is to weaken Iran's ability to attack vessels in the strait. Tehran responded symmetrically: missiles and drones were launched at American targets in the region. Iranian authorities again declared the strait closed, warning vessels against deviating from permitted routes.
The key point is Washington's intention to take direct control of the Strait of Hormuz. In peacetime, about a fifth of the world's oil trade passes through this corridor. Shipping data already shows a collapse: in the 12 hours of Sunday, only nine vessels managed to transit the strait, whereas before the start of military operations, the average daily number of transits approached 130.
The reaction of stock markets is mixed. Japanese stocks lost 82 trillion yen over three weeks, with the Nikkei 225 index falling nearly 2% on Monday. For oil contracts, on the contrary, the reassessment of risks resulted in a sharp rise. South Korean stocks continued to fall, mainly due to a decline in chipmakers sensitive to global shocks.
Technical Signal: RSI Breaks Resistance After Three Failures
The daily RSI for Brent rose to the 55 mark and settled above the neutral level of 50. This is an important signal: initiative has passed to buyers. Until now, the price recovery was constrained by a downward resistance line that emerged after the March RSI peak at 90. Sellers stopped the rally three times — in May at 64 and 58, and in June at 46.
At the end of June, the momentum indicator dropped to 27, nearly entering oversold territory. In early July, the RSI finally broke above the downward trend line and moved above the neutral zone, confirming the breakout. The signal will turn bearish only if the RSI falls back below 50 and drops under the broken line. Until this happens, momentum supports the recovery that began from the July low.
Brent Forecast: Focus on the $90–$92 Zone
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 down from the triangle and by early July fell to the $71–$73 support zone. This zone held. Buyers built a base there over two weeks, and Monday's session allowed the price to rise higher. Brent opened near $78 and reached a high of $83.54 during the day.
The next significant resistance lies in the $90–$92 area. In the spring, this zone served as support for the triangle, and now it has become a key confirmation of the downward breakout. If sellers become active here again, it will confirm the bearish scenario, and the price could return to $71–$73. If Brent closes the day above $92, it will cancel the downward breakout and restore the bullish sentiment from the start of the year.
The $90–$92 range will be decisive for the current recovery: whether Monday's surge becomes a reversal or another lower high. The geopolitical risk premium is likely to persist as long as Iran continues to maintain tension in the Strait of Hormuz.
My analysis: The market is reassessing risks, and the current jump is not just a speculative spike. The closure of the strait for transit is a direct blow to global energy supply chains. If the situation does not de-escalate in the coming days, we will see Brent above $90, and this will become a new fundamental level for the entire commodity sector.