Crude Oil Prices: Brent and WTI Fall 5% as Iran and US Halt Strikes

Brent and West Texas Intermediate crude oil prices fell sharply Monday as traders removed part of the geopolitical risk premium tied to the conflict with Iran. Brent dropped 5.1% to $83.44 a barrel by 4:08 a.m. GMT, while WTI lost 5.8% to $79.77.

The sell-off followed President Donald Trump’s decision to hold off on a planned attack against Iran while the two countries pursue an agreement. The market interpreted the announcement as a possible step toward safer oil shipments through the Strait of Hormuz, although traffic through the waterway remains restricted.

Oil prices also faced pressure from OPEC+. Seven members of the producer alliance approved a September output increase of about 188,000 barrels per day, completing the phased return of 1.65 million barrels per day in voluntary cuts introduced in 2023.

Improving supply outside the Persian Gulf added to the bearish pressure. The Caspian Pipeline Consortium resumed oil loading at its Black Sea terminal on July 27, with two tankers returning to its single-point moorings.

Brent Weekly Chart Keeps Correction Risk in Focus

The Brent weekly chart shows that the benchmark remains in a weak corrective structure despite the possibility of a short-term rebound.

Brent Weekly Correction. Source: Sahil Pahwa (@Sahilpahwa09) on X

Brent traded near $83.75 on the supplied chart after an 8% weekly decline. The current candle reached a low around $81.55, making the $81-to-$82 region the first area buyers need to defend.

The analyst labels the decline as Wave C of an Elliott Wave correction. Under that scenario, temporary rebounds could face renewed selling until price forms a clearer bottom. This is an interpretation rather than a confirmed outcome.

Brent’s weekly relative strength index stands near 48, while several shorter time frames show readings in the mid-30s. Those lower readings could support an oversold bounce, but momentum would remain weak below roughly $91. Stronger resistance appears near the chart’s $97.41 Fibonacci level.

A break beneath $81.55 could expose the $77 and $73 regions. The drawn path toward approximately $60 represents the analyst’s longer-term projection, not a confirmed target.

Strait of Hormuz Traffic Has Not Returned to Normal

Diplomatic optimism has reduced immediate supply fears, but the physical shipping data continues to show disruption.

Strait of Hormuz Daily Tonnage. Source: TankerMap

The six-month graph shows high crude-oil tonnage moving through Hormuz during February, followed by a steep collapse in March. Traffic remained irregular through June and July, with brief spikes rather than a sustained return to earlier levels.

That pattern matters because lower oil prices currently reflect expectations that negotiations will improve shipping conditions. The graph does not yet show that normalization has happened.

Separate vessel-tracking data also showed thin Hormuz traffic at the end of July. Two very large crude carriers exited the strait July 31, but overall commodity-vessel movements remained limited, and some ships may not have appeared in tracking data because their transponders were disabled.

WTI Tests $78 Support After Falling Below Key Averages

The WTI four-hour chart supports a bearish near-term outlook, although the price is approaching an important support zone.

WTI Four-Hour Support Test. Source: TradewithKrutikaa (@Financewith_dia) on X

WTI traded near $79.80 on the chart after falling below its short- and medium-term moving averages. The four-hour RSI stood near 39.7, showing weak momentum without reaching a deeply oversold level.

Immediate support sits at $78.10. A confirmed breakdown could bring $76.30 into focus, close to the 200-period moving average around $77.20. The next lower level marked by the analyst is $72.70.

WTI must recover above $83.60 to reduce immediate selling pressure. A move above $86.25 would provide stronger evidence that buyers have regained control.

Crude Oil Outlook

The near-term outlook depends on whether diplomatic headlines produce real improvements in physical supply. Successful U.S.-Iran negotiations, safer Hormuz traffic and higher OPEC+ production could keep Brent and WTI under pressure.

However, another tanker incident, failed negotiations or renewed military action could quickly restore the geopolitical risk premium. Until shipping flows recover consistently, the oil market remains vulnerable to sharp moves in both directions.