04.05.202608:47 Forex Analysis & Reviews: Oil Prices Slightly Decrease but Then Resume Growth

Brent crude oil prices demonstrated volatility: starting with a 2.4% decline, they then regained lost ground and, at the time of writing, are trading at $108 per barrel. This dynamic follows a statement from President Donald Trump about the initiation of a new phase, which involves directing American vessels not engaged in conflict with Iran through the Strait of Hormuz. However, a senior Iranian official expressed Tehran's position, stating that any U.S. intervention in the affairs of the Strait would be seen as a violation of the ceasefire regime.

The market is closely monitoring any movement related to the Strait of Hormuz, through which a significant portion of global oil supplies passed just two months ago. Trump's statement inevitably prompted an immediate reaction, as it directly concerns the potential escalation of tensions in one of the most critical regions for energy security.

The position of Iran, articulated by the senior representative, added a layer of uncertainty. The assessment of the American military presence as a violation of the ceasefire regime demonstrated Tehran's readiness to retaliate if its interests are affected. This created a dilemma for Washington: to ensure freedom of navigation while risking provoking a new conflict, or to retreat, which could be perceived as a sign of weakness.

Any news suggesting a potential reduction in supplies from the Persian Gulf region automatically pushes prices upward. Conversely, signals indicating a decrease in tensions or a diplomatic resolution can provoke a sharp decline.

According to the latest data from the Joint Maritime Information Center, an international organization that exchanges information about shipping routes, America has already established a zone of heightened security to ensure transit through the Strait of Hormuz, south of the vessel traffic separation zone, and vessels should consider transiting through Omani territorial waters south of it. However, whether anyone will take advantage of this opportunity is a complex question.

Regarding the current technical picture of oil, buyers need to reclaim the nearest resistance at $106.83. This will allow an aim for $113.00, above which it will be quite challenging to break through. The furthest target will be around $118.80. In the event of a decline in oil prices, bears will attempt to take control of $100.40. If successful, breaking the range will deal a serious blow to the bulls' positions and push oil down to a low of $92.50, with a prospect of reaching $86.67.