Brent Crude Sinks to $70 as Hormuz Risk Premium Vanishes

The US-Iran ceasefire announced June 14 has eviscerated the geopolitical risk premium that propped up Brent crude through the first half of the year. Traders are now pricing in a return of normal shipments through the Strait of Hormuz, a shift that accelerated after a technical breakdown on May 25 when the medium-term uptrend shattered on a downside gap. That breakdown followed an earlier breach of $80 support, covered in our prior analysis.

Brent has since sliced through the lower boundary of the market profile, with the next major floor at $70 a barrel. The chart shows resistance now sits near $95, with a thicker supply zone between $103 and $104 – the old point-of-control area. A recovery above $113 would bring the $120.50 level into play, though such a move would require a full reversal of the supply expectations triggered by the ceasefire.

Momentum indicators confirm the negative tilt. The RSI sits at 28, below the oversold threshold, while the 38- and 43-period moving averages slope downward. Vertical volume shows no anomaly. The selling is orderly so far, with no capitulation spike that would signal a washout. That means further downside is possible before a relief rally finds traction, traders said.

The market structure points lower as long as the ceasefire holds. Iranian exports through Hormuz could resume in weeks, flooding a market already expecting higher output from OPEC+ producers. The next catalyst is any official statement from Iran or the US about the resumption timeline for oil exports. A drop below $70 would likely accelerate selling toward the 2025 lows near $62.

Tight spreads on Brent CFDs are available from FXOpen. This article reflects the opinion of the companies operating under the FXOpen brand and is not financial advice.