Oil Price Forecast: WTI and Brent Eye Support as Iran Talks Ease Tensions

• Crude oil exports through the Strait of Hormuz averaged just 2.9 million barrels per day last week, down sharply from 5.9 million barrels per day the previous week, indicating continued supply disruption despite diplomatic progress.
• WTI crude is testing key $80 support, with a break below potentially pushing prices toward $74, while Brent approaches $85 support defined by the intersection of 50 and 200-day moving averages.
• Weak demand in Asia due to price sensitivity is limiting upside despite Middle East supply constraints, keeping Brent below $90 even as geopolitical risks and Houthi threats remain active.

Oil Price Summary: WTI and Brent Under Pressure Amid Iran Diplomacy

Key Price Movements

• WTI crude: Dropped to $81.50 per barrel (-0.91%), lowest level in over a week
• Brent crude: Fell to $89.85 per barrel (-0.94%), lowest in over a week
• Both benchmarks retreated from recent highs as geopolitical tensions eased

Main Developments

Oil prices declined Tuesday following optimistic statements from the U.S. President regarding diplomatic progress with Iran, tempering fears of Middle East supply disruptions. However, significant risks remain volatile.

Supply Disruptions:

• Strait of Hormuz traffic averaged just 2.9 million barrels per day last week, down sharply from 5.9 million bpd the previous week (Barclays data)
• Red Sea shipping also reduced due to ongoing Houthi threats
• Supply constraints persist despite diplomatic progress

Demand Factors:

Weak Asian demand is capping price increases, with consumers increasingly price-sensitive at current elevated levels. This demand weakness explains why Brent remains below $90 despite supply restrictions.

Technical Outlook

WTI: Testing critical $80 support level. Break below could push prices to $74; recovery above $87 targets $100. Long-term range: $66-$120

Brent: Approaching $85 support zone (50/200 SMA intersection) after rejection at $100. Break below $85 risks decline to $80; rally above $90 could target $100

Market Implications

Prices remain highly sensitive to U.S.-Iran negotiations. Successful diplomacy would likely push prices lower, while breakdown in talks or escalating attacks could trigger sharp rallies. Current consolidation reflects significant market uncertainty driven by geopolitical risks balanced against weak demand fundamentals.