Oil Tests $97.50 as Strait of Hormuz Closure Threatens Supply

Oil prices pushed higher Monday after Iran announced the closure of the Strait of Hormuz, a chokepoint that handles roughly a fifth of the world's daily oil supply. Brent crude rose toward $93 a barrel, while WTI crude tested the $97.50 resistance zone that has capped the market since the U.S.-Iran conflict escalated in February.

The Strait of Hormuz carries about 17 million barrels of crude and refined products each day, according to the U.S. Energy Information Administration. Iran's threat to target vessels attempting to transit the waterway puts a risk premium into crude that traders said could widen if the blockade holds. U.S. crude inventories have already drawn down in recent weeks, and OPEC production has slipped as the conflict disrupts Gulf output.

WTI crude has been compressing inside a triangle pattern between $87 and $97.50 since the war began. The rebound from $87 support was expected, traders said, and the test of the upper boundary now sets up a binary outcome. A break above $97.50 would open a path toward $105 in the near term. A rejection and move below $87 would target the $80 area, where the 200-week moving average sits.

Brent crude shows a similar structure on the weekly chart. The Adam and Eve pattern that broke above $70 in February 2026 pushed prices through $80 resistance, which coincided with the 200-week SMA. Brent failed to clear the $125 to $135 zone, a long-term resistance band that has held since the initial war spike. The correction from $120 back toward $90 brought the relative strength index down from extremely overbought levels. The 50-week SMA is now converging on the 200-week SMA near $80, a level traders said could offer a structural buy signal if tested.

On the daily chart, Brent has formed support above $90, where the resistance line of a descending broadening wedge has flipped to support. A hold above $90 and a bottom pattern above that level would confirm a longer-term floor, traders said. A break below $90 would put the $80 zone in play.

The risk premium tied to the Strait of Hormuz is the dominant variable. Any sign of a reopening or a ceasefire would collapse that premium quickly, traders said. For now, the market is pricing in continued disruption. The next scheduled data point is Wednesday's U.S. crude inventory report, which will show whether the supply drain is accelerating.

From a positioning standpoint, the weekly RSI on both contracts has cooled from overbought extremes, leaving room for another leg higher if the geopolitical catalyst holds. The setup is clean: WTI above $97.50 targets $105, Brent above $90 keeps the bull structure intact. A break the other way changes the trade entirely.