Brent crude fell below the $90 level, confirming a decisive shift in market sentiment as geopolitical risks ease. This move comes in the wake of sharp selling resulting from news of the announcement of the full opening of the Strait of Hormuz to commercial shipping during the ceasefire period. This development removes one of the most important supply risks and accelerates the elimination of the war premium that has supported oil prices in recent weeks.
This incentive came after Iranian Foreign Minister Abbas Araqchi announced that passage through Hormuz was “fully open,” in line with broader efforts to de-escalate the region. Donald Trump’s reaction reinforced this shift, with the US president noting that negotiations were nearing completion and suggesting that “most of the points have already been negotiated.” Markets interpreted this as a strong signal that a deal – at least in principle – was within reach.
Technically, rejection at the 4-hour moving average (now at 100.72) was a clear bearish signal in the near term. The focus now is on whether Brent’s decline will extend through the floor of the near-term descending channel, closing the week below the 55 D EMA (now at around 90.85).
If so, it would set up a further decline towards the next major support level at 81.41 (61.8% retracement level from 58.88 to 119.70 at 82.11) at the beginning of next week. However, further declines will now remain in favor as long as 95.94 support turns into resistance.
