Oil rebounds 0.7% as US-Iran talks keep Hormuz risk alive

Oil prices rebounded 0.7 percent Tuesday as conflicting US-Iran signals kept the Strait of Hormuz supply risk alive, with Brent at $84.39 and WTI at $80.95 after a sharp prior-session selloff.

"Some of the sting has been taken out of oil prices with Trump pausing strikes on Iran and touting a return to negotiations, though the move lower remains fragile — oil could just as easily rebound higher if missiles start flying again or if tankers around the Strait of Hormuz come under fire once more," Tim Waterer, chief market analyst at KCM Trade, said.

Prices had plunged in the previous session after President Donald Trump said Sunday he was holding off on new attacks on Iran pending talks to end their war. But Iran's Foreign Ministry spokesman Esmail Baghaei rejected that claim Monday, saying no negotiations with the US were taking place and no meetings were scheduled. The conflicting signals have left traders uncertain about the trajectory of the conflict that began with US and Israeli attacks on Iran in February 2026.

The stakes are high: the Strait of Hormuz carries roughly 20 percent of global oil consumption daily, and Barclays data shows crude and refined product net exports through the waterway averaged 4.2 million barrels per day in the week ended July 31, up from 3.2 million bpd the prior week. Any renewed attacks on tankers or energy infrastructure near the chokepoint could quickly erase the diplomatic optimism and push prices sharply higher.

Shipping disruptions continue to reinforce the risk premium. Six Saudi-flagged supertankers changed course in the Gulf of Aden and are heading to southern Africa, while two tankers laden with Saudi oil crossed the Bab el-Mandeb Strait, shipping data showed Monday. The United Kingdom Maritime Trade Operations reported an incident 20 nautical miles northeast of Oman's Al Khasab after a cargo vessel broadcast that it had been hit by an unknown projectile.

The rerouting adds time, fuel, and insurance costs to every voyage. Traffic in the Strait of Hormuz between Iran and Oman has also slowed following reports of vessel attacks. The EIA estimates approximately 20.9 million barrels per day of petroleum liquids passed through the strait in the first half of 2025, equivalent to about 20 percent of global consumption and one-quarter of maritime oil trade. Alternative pipelines bypassing the strait can carry only about 4.7 million barrels per day — a fraction of normal Hormuz traffic.

WTI Holds $77.50 Support as Breakout Above $90 Targets $100

On the 4-hour chart, WTI has again tested the short-term support at $77.50 — the neckline of the rounding bottom pattern formed in June — and rebounded higher. The price has already broken the descending channel pattern and is now hovering around the channel's resistance. A clear break above $90 could push WTI toward the $100 region, while a break below $77.50 may expose the $65 area.

The weekly chart shows prices have traded between $70 and $120 over the past few months, reflecting the deep uncertainty in the market. A clear break below $69 would put further pressure on WTI, while a break above $120 would open the door for a strong rally.

Brent Consolidates Above $85 as Recovery Depends on $90 Break

Brent crude is consolidating above the 50-day SMA on the daily chart, remaining below $90. Immediate support sits at $85; a break below this level would push Brent toward $81. But a clear recovery above $90 would target the $100 region. The RSI is fluctuating above the midline, highlighting positive short-term price action.

On the weekly chart, Brent is consolidating near the $80-$85 region after failing to break above $100 in July. The overall momentum has shifted to the upside since the Iran war began, but the market remains highly volatile with no clear direction.

The market could remain choppy until both parties demonstrate clear progress toward an agreement. Any diplomatic breakthrough would likely reduce supply concerns and pressure oil prices lower, while further shipping disruptions near the Strait of Hormuz could push prices significantly higher. For now, traders are watching whether WTI can sustain a break above $90 and whether Brent can reclaim that level to confirm the next leg higher.

This article is for informational purposes only and does not constitute investment advice.