Oil Rally Tests $88 as Trump Slaps 20% Fee on Hormuz Traffic
Trump's 20% fee on Hormuz shipping and renewed Iran port blockade pushed WTI 13.8% higher in July. A breakout above $88 targets $100.
Oil prices extended their July rally Tuesday after President Donald Trump announced a 20% fee on all shipping traffic transiting the Strait of Hormuz and said he intends to reimpose a blockade on Iranian ports near the strait.
WTI crude rose 13.8% in July. Brent gained 14.75%. The new fees add a direct cost to every barrel moving through the chokepoint, where about a fifth of global oil supply passes daily. Citigroup warned that Iran could delay nuclear negotiations until after the U.S. midterm elections, a scenario that would keep supply risks elevated for months.
WTI broke above a descending trendline at $77, a level that had capped rallies since April. The breakout opens a path to resistance at $88, measured from the same descending channel pattern that stretches from the April 2026 highs. A move above $88 would target $100, traders said. A recovery back below $70 would likely trigger a drop toward $60.
The price action since June has formed a bottoming pattern, with strong long-term support at $66. That level is measured from a descending trendline stretching from the September 2023 highs. The rebound from that zone, highlighted in green on daily charts, points to a run toward the $85 to $90 area, several technical analysts said.
The Relative Strength Index has recovered above its midpoint after an oversold reading in June, suggesting short-term momentum favors the upside.
Brent crude found support in the $72 to $74 region and broke above $81, clearing the 200-day simple moving average. The next resistance is the 50-day SMA near $88. A weekly chart shows the $72 area acted as a major floor, with the price recovering above both the 50- and 200-day SMAs. The next important resistance for Brent is $100, and a break above that level would signal a strong rally, traders said.
For now, the escalation in the Middle East keeps the bid under oil. WTI is building momentum toward $88. Brent is eyeing $90. A break above $90 on Brent would indicate a run at $100. The short-term direction remains positive as long as prices hold above the critical support zones established in June.
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