Brent prices are currently sitting slightly below the psychologically important $100 per barrel level, down from recent peaks. The reason behind this decline is the two-week peace deal between the United States and Iran concluded on April 8—minutes before the expiration of the American ultimatum demanding that Tehran allow oil tankers passage through the Strait of Hormuz. Crude quotes plunged by more than 15% in an instant after the announcement, marking the steepest drop in years.
The following day, April 9, Brent prices managed to modestly recover, climbing to the $95–$98 range, as doubts over the sustainability of the peace agreement emerged. To add even more fuel to the fire, Iranian media reported that restrictions on energy transit through the Strait of Hormuz remain in place due to violations by Israel. That said, the two sides are scheduled to meet in Pakistan this weekend to continue direct negotiations.
On the fundamental front, the long-awaited truce could help stabilize global energy supply chains, even though the structural deficit left by the six-week blockade of the world’s key fuel route won’t disappear overnight. So, traders have to keep their hopes in check, as oil prices are unlikely to return to pre-conflict levels anytime soon. Nevertheless, the current downtrend is expected to persist amid peace talks, provided that no new shocks or provocations arise.
The final recommendation:
— Sell Brent crude at the current price, aiming for $92.5 per barrel within the next couple of weeks.
— Place a Stop Loss order at $102.0, just above resistance, to manage risks if the market plays against us.
This content is for informational purposes only and is not intended to be investing advice.
