Forex▼ Bearish
WTI Oil Breaks $78 as Traders Price Iran Truce
WTI crude broke through $78 support as Trump said he wants to avoid Middle East escalation. Brent fell below $83. Traders see Strait of Hormuz reopening within weeks.
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Oil prices fell to fresh lows on Wednesday after President Donald Trump said he preferred to avoid escalation in the Middle East, a signal traders read as a step toward a temporary de-escalation with Iran.
WTI crude slid through the $78.00-$78.50 support zone, testing new lows for the week. Brent oil followed, pushing below $83.00. Both benchmarks have shed roughly $5 a barrel since Friday, when reports first emerged that Iran and Oman had discussed restarting navigation in the Strait of Hormuz.
Trump told reporters the U.S. had a “very strong position” in negotiations but that he wanted to avoid further escalation. The comments followed four consecutive days without direct military exchanges between U.S. and Iranian forces, a stretch traders said raised the odds of a short-term deal.
“The market is pricing a reopening of the Strait of Hormuz within weeks,” said one London-based oil trader. “Traffic would come back fast once the political signal is clear.”
Iran and Oman have discussed restoring freedom of navigation through the strait, which handles roughly one-fifth of global oil consumption. Iran has linked the reopening to a restart of comprehensive talks with the U.S. covering its nuclear program, according to reports out of the region.