Oil Price Forecast: Brent and WTI Eye Breakout as Strait of Hormuz Risk Grows

Oil prices rallied as the United States and Iran moved into a more dangerous phase of the conflict. In response to new U.S. strikes on Iran, Tehran announced the closure of the Strait of Hormuz. The Strait is significant threat to the energy market as it is used for the transport of a high proportion of the world’s trade in oil and gas. Traders responded swiftly and Brent and WTI ticked up due to concerns about supply.

The threat of closure puts a strong risk premium into the price of crude. Disruptions to tanker traffic over the Strait of Hormuz have the potential to further reduce the global supply and raise prices. This situation also raises concerns as Iran threatened to target any vessel attempting to go through the Strait. That makes the market more sensitive to the news coming from the Middle East.

The supply situation is already not good. Inventories for U.S. crude oil also were down and OPEC’s crude oil production has declined significantly as a result of the blockade and reduced production from the Gulf. These factors contribute to higher oil prices in the short term. If the war continues and energy supplies remain limited, then the price of Brent and WTI might remain high. But any indication of a peace deal or the reopening of the Strait would cool down the oil prices.

WTI Oil Technical Analysis – $97.50 Breakout May Open Path to $105

From a technical perspective, the recent rally in WTI crude oil was driven by strong support of $87 that pushed WTI to $93.40. Therefore, the rebound was highly expected. WTI prices have been consolidating within the triangle pattern as seen by the black dotted trend line between the $87 and $97.50 levels.

The prices are compressing at the edge of this triangle. A break of this zone will likely define the next move in the WTI crude oil market.

Overall, WTI prices have been trading within $120 and $80 after the U.S.-Iran war. This keeps strong volatility in the oil market.

A break of $97.50 will push WTI crude oil towards $105 in the short term. But a break below $87 will push WTI crude oil towards the $80 area. The ongoing uncertainty in the Middle East increases supply concerns. These concerns may keep WTI crude oil elevated in the short term.

This positive momentum in WTI is also evident on the weekly chart. The chart shows the formation of an Adam and Eve pattern above the long-term support of $55.

The Adam and Eve pattern was broken at the $80 level, which pushed prices towards the $120 area. But WTI crude oil failed to break above the $120 level as this is strong long-term resistance in the WTI market.

However, if prices remain above the $80 region and consolidate between $80 and $120 for an extended period, then the possibility of an upside breakout will increase. A break above $120 will likely push WTI crude oil towards $150 and $200.

Brent Oil Technical Analysis – $90 Support Is Key for Next Rally

Brent crude oil also shows the formation of a strong bullish Adam and Eve pattern on the weekly chart. The Adam and Eve pattern was broken at $70 in February 2026. This breakout also pushed Brent crude oil above the $80 resistance, which was the 200 SMA on the weekly chart.

But Brent crude oil failed to break above the $125 to $135 zone, which is strong long-term resistance.

The correction from the $120 area back towards the $90 area is due to the extremely overbought condition seen by the RSI.

It is interesting to note that the 50 SMA is now approaching the 200 SMA at the $80 level, which now becomes the key pivotal level in the Brent crude oil market.

Any correction back towards $80 will likely offer a strong buy signal for investors, which may push Brent towards the $125 to $135 area.

The RSI indicator also shows extremely overbought conditions at the $120 area. But now the RSI is cooling towards the mid-level. This suggests that prices may rise again after rebounding from this support.

The strong support in Brent crude oil is also evident on the daily chart. The chart shows the formation of support above the $90 area. The resistance of the descending broadening wedge defines this area. That resistance now becomes support.

If the $90 support holds and Brent oil rebounds by forming a bottom pattern above this area, it may form a long-term bottom in the Brent crude oil market.

Bottom Line

Oil prices remain supported as the risk of the Strait of Hormuz keeps supply fears high. The U.S.-Iran conflict has added a strong risk premium to the Brent and WTI and declining inventories and production cuts from OPEC weigh on the market.

From technical perspective, a break in WTI oil above $97.50 will push the prices to $105. On the other hand, Brent oil must hold above $90 to maintain the bull market structure. If the conflict persists and energy supply does not increase, oil prices are likely to remain at current levels or rise further. But any signs of a peace deal or reopening of the Strait will further lower the risk premium and trigger a sharp pullback.

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