$CL Crude oil continued its consolidation trend at the start of the week, with WTI stuck around $68.60, briefly rising to $69.26 during the day before falling below $69 on Monday. This follows a weak attempt at a recovery that has continued since last Friday, but the strength of the recovery remains limited.

The situation in the Strait of Hormuz remains central to this pricing. According to the latest reports, some tankers were still making unusual route changes on Saturday, while major sea lanes reportedly returned to near-normal levels by Sunday. Saudi Arabia's crude oil exports have recovered to approximately ninety percent of pre-war levels, and the United Arab Emirates has similarly returned to pre-war export levels using the pipeline through the strait. Total daily flow through the strait has exceeded 10 million barrels.

However, supply-side pressure remains quite significant. OPEC+ has approved an additional production increase of 188,000 barrels per day for next month, primarily led by Saudi Arabia and Russia. Iran is also reportedly in talks to resume crude oil sales to Japanese companies under a temporary US sanctions waiver, which is reflected in expectations of additional supply to the market. Saudi Arabia also lowered its main crude oil price for Asia, discounting it to $1.50 per barrel compared to the Oman/Dubai reference, indicating that the supply surplus is also being felt on the pricing side.

However, geopolitical risk has not completely disappeared. Last week, the Iranian Revolutionary Guard warned tankers about unauthorized passage, and the dispute between Iran and the US over the long-term management of the strait and transit fees remains unresolved. Iran defines it as a maritime service fee, while the US argues that it is an international waterway and should not be charged. This unresolved dispute remains a real source of fragility underlying the current calm price environment.

The given resistance and support levels accurately reflect this balanced but tense environment. Short-term resistance starts at 68.90 and extends to 69.25, 69.95, 70.20, and 70.80, while support starts at 68.35 and extends to 68.00, 67.70, 67.40, and 67.00. The technical outlook remains weak at the moment; WTI is trading below its short-term moving averages, and the $70 level stands out as a critical ceiling. Some analysts suggest that if prices remain below this level, they could fall to $60, while a decisive breakout above $70 could reverse the outlook upwards.

For those following energy-related assets via the Gate, the key point to watch is that as long as transit through the strait continues to normalize, the geopolitical risk premium appears likely to continue eroding. However, it is still too early to assume this calm will be permanent until the transit fee dispute between Iran and the US is resolved. Any news of new friction could quickly break this narrow consolidation band upwards.

$XTIUSD $XBRUSD

DYOR 🔍