Oil prices come under heavy selling pressure after Iran signals a willingness to reopen the Strait of Hormuz. Despite crude prices surging more than 22% in July amid escalating US-Iran military tensions, traders remain cautious as doubts persist over the durability of the emerging peace agreement.
WTI crude oil futures on the NYMEX remain under significant pressure, falling 7.6% to around $78.60 during Monday’s Asian session. The decline comes after US President Donald Trump announced that planned strikes against Iran had been paused, following Tehran’s reported agreement to abandon its nuclear ambitions and fully reopen the Strait of Hormuz — a vital shipping route that handles nearly 20% of global energy flows.
Trump stated on Truth Social that Iran and other Middle Eastern nations had requested a halt to military action after the framework of a deal was reached, including the immediate reopening of the Strait of Hormuz and the removal of Iran’s nuclear threat.
The announcement has raised expectations for renewed diplomatic negotiations between Washington and Tehran, easing concerns over a prolonged disruption to global oil supplies.
However, WTI had previously surged more than 22.5% in July as escalating military tensions between the US and Iran fueled fears of supply constraints following the collapse of a ceasefire agreement.
Despite the latest developments, market participants remain cautious about the durability of the truce, with concerns that renewed tensions could once again threaten energy flows through the Strait of Hormuz. Analysts at IG Markets warned that the key question is whether this week will repeat the previous pattern, where hopes of a deal fade as Iran maintains pressure over the strategic waterway.
WTI Technical Analysis
WTI crude oil is trading lower near $78.70, maintaining a bearish short-term outlook as prices continue to hold below the 20-hour exponential moving average (EMA) at $81.18. The failure to reclaim this key indicator suggests sellers remain in control following the recent pullback from the mid-$80 range. Meanwhile, the Relative Strength Index (RSI) stands at 34.20, close to oversold levels, indicating that downward momentum remains strong but has not yet reached an extreme exhaustion point.
On the upside, the 20-hour EMA around $81.18 represents the first major resistance level and a crucial hurdle for buyers. A sustained move above this area would help reduce near-term selling pressure and signal a potential recovery attempt.
On the downside, the July 28 low at $77.16 serves as the key support level. A decisive break below this zone could trigger further losses, potentially opening the way toward the July 13 low at $72.53.
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