Brent oil surged 11%: geopolitical shock and technical breakout
On Monday, the oil market experienced a massive price shock: the cost of Brent (UKOIL) surged nearly 11%, reaching $83.31. This jump was the most significant since the escalation of the confrontation between the US and Iran in late February.
Geopolitical factor: control over the Strait of Hormuz
The catalyst for the growth was new US strikes on Iranian targets and Washington's statements about its intention to take direct control of the Strait of Hormuz. About a fifth of all global oil trade passes through this strategic corridor in peacetime. In response, Tehran struck US facilities in the region and again declared the strait closed, warning vessels to strictly adhere to permitted routes.
Shipping data already records a collapse: over 12 hours on Sunday, only nine vessels managed to pass through the strait, whereas before the start of military operations, the average daily number of transits approached 130. Stock markets are reacting in different directions: Japan's Nikkei 225 lost nearly 2%, while oil contracts are experiencing a turbulent surge in risk reassessment.
Technical picture: RSI broke resistance after three failures
The daily Relative Strength Index (RSI) for Brent rose to the 55 mark and consolidated above the neutral level of 50. This breakout is particularly significant: sellers stopped the indicator's growth three times — in May at levels of 64 and 58, and in June at 46. After falling to 27 in late June (oversold zone), the RSI finally broke through the downward trend line, confirming a shift in initiative in favor of buyers.
Forecast: key range $90–$92
From February to May, Brent moved within a large symmetrical triangle with a peak at $118 and a base at $91. In late May, the price broke downward and by early July had fallen to support at $71–$73. Buyers formed a base there over two weeks, and Monday's session allowed Brent to rise above $83.
The next significant resistance is in the $90–$92 zone. In the spring, this level acted as support for the triangle, and now it will become a key test for the current recovery. If sellers become active here, the bearish scenario will be confirmed, and the price could return to $71–$73. However, a daily close above $92 would cancel the downward breakout and restore the bullish sentiment from the start of the year.
My analysis: The current surge is a classic example of a geopolitical premium, which will likely persist as long as tensions in the Strait of Hormuz do not ease. Technically, the RSI breakout above 50 and the bounce from the $71–$73 zone create prerequisites for testing $90–$92. However, to confirm a reversal, Brent needs to consolidate above $85. Until this happens, the growth remains a correction within the long-term downtrend.