Oil Price Forecast: WTI and Brent Rebound as Iran Risk Revives Supply Fears

Oil prices rebound from the support zone as traders respond to recent U.S. military strikes against Iranian military targets. WTI oil is back above $92 while Brent oil is above $99. This rebound suggests that the market is not discounting a diplomatic outcome. The optimism of a possible deal pushed WTI and Brent oil lower last week. But the prices rebound again as markets worry about the supply risk premiums with the latest military action.

The Strait of Hormuz still remains the main driver. A deal had been expected to ease traffic along the waterway and reduce pressure on global supply. But the conflicting messages from Washington and Tehran have dampened the feeling. Trump’s remarks also increased uncertainty as he dismissed possibility of easing sanctions and mentioned that negotiations with Tehran must be on U.S. terms. This makes the oil market sensitive to each headline.

The inventory data is another bullish signal. The American Petroleum Institute (API) cited a 2.8 million barrel reduction in U.S. crude inventories, the sixth consecutive weekly decline.

This indicates a tight situation in the physical market prior to the possible new disruption in the Middle East. Thus, the price of oil could remain high unless negotiations result in a definitive deal and trade returns to normal in the Strait of Hormuz. The lack of diplomacy could send Brent and WTI back into another big rally.

WTI Oil Technical Analysis: Rebound from Support Keeps Bulls in Control

The short term price structure for WTI crude shows a rebound from the $89.60 level back toward the $102 area. WTI crude failed to break below $89.60 and rebounded higher.

The WTI oil remains consolidated between $80 and $120, following the initial spike of the US-Iran war. A break of either of these levels will likely define the next move. A break above $120 will likely take WTI crude prices much higher due to supply issues. But if WTI oil remains above $100, prices are considered expensive.

The formation of Adam and Eve patterns above the $102 area shows constructive price action. The breakout from the $80 level indicates that oil prices remain in a strong bullish trend. However, the resistance at $120 is protecting the next upside move.

But the consolidation between the $80 and $120 area highlights strong volatility. This volatility will likely be resolved to the upside if prices break above $120.

Brent Oil Technical Analysis: Breakout Structure Targets Higher Levels

Brent crude oil also shows the formation of an Adam and Eve pattern above the $58 region. This pattern suggests constructive price action. The price action in Brent oil is even more constructive, as the price broke above the black trend line at $72 in February 2026.

The price also broke the $100 level in March 2026, which pushed prices to $120. Overall, the resistance between $126 and $135 remains the key target after the breakout of $100.

The oil market is consolidating above the $100 region despite strong volatility. The formation of shadows on the weekly candle above $100 indicates bullish price strength. However, last week’s close in Brent crude oil was negative.

The recent consolidation in Brent oil is also due to stabilization in the oil market from the extremely overbought level, as seen by the RSI. The RSI is still above the midline. If the RSI returns to the midline, it will likely trigger a strong buy signal.

The long-term monthly chart for Brent crude oil shows that the recent correction in May does not undermine the bullish structure. The closing level for May will be important to define the next direction for June. A monthly close above $110 in Brent will keep Brent oil under strong bullish momentum. Moreover, the formation of a double bottom pattern at $58 in 2025 shows bullish price action in the Brent crude oil market.

Bottom Line

Oil prices remain supported as continued U.S. attacks on Iran revive the supply risk premium. WTI oil has bounced off of important support, while Brent remains above the major breakout area. The Strait of Hormuz remains the main driver and any news from Washington or Tehran can move the markets quickly. Another positive influence is tight physical supplies indicated by falling U.S. crude inventories. The overall oil trend is bullish as long as WTI and Brent remain above $80. A break above $120 is required to initiate the next big move.

Read more: Brent and WTI Rise on US-Iran Risk