Sell Brent crude with $79.80 target on Strait of Hormuz reopening

Right now, Brent crude is licking its wounds at around $83.77 per barrel after sliding to new multi-week lows. What triggered this? The surprise US‑Iran interim deal that greenlights the reopening of the Strait of Hormuz. In a single session, prices got hammered by nearly 5% as traders braced for a fresh wave of oil.

The first signs of a supply glut have already been rippling through the forward curve. Middle Eastern benchmarks Dubai and Murban have flipped into contango for the first time since the shipping disruptions began—a clear signal that fears over physical shortages are starting to fade.

Making matters worse, demand from a key consumer is wilting. Chinese refineries cut throughput to a nearly four-year low in May, and GL Consulting expects another 5% reduction by year-end. Put simply, with structurally weaker demand on the one side and swelling supply on the other, the bearish case is only getting stronger. 

That said, residual risks are throwing the market a lifeline. Israel has already poured cold water on the deal, insisting that it won't be bound by the memorandum, keeping the geopolitical pot simmering. Meanwhile, US strategic reserves have plunged to their lowest level since 1983, which could spark some buying interest for replenishment. But let's be honest—these factors may only slow the descent; they are unlikely to reverse the whole trajectory.

On the technical front, the picture is grim. Prices are hugging the lower Bollinger Band (currently at $84.84), while the Chaikin Oscillator is stuck in the red—a dead giveaway that sellers remain in control. Yes, the indicator's slide has lost some steam, and there are faint signs of a breather. However, don't mistake a pause for a pivot—this looks like a fake-out bounce before the next leg down. Oil is still trapped within a descending channel.

For those ready to take action, consider the trading plan down below:

Sell Brent crude from $86.00. Place Take Profit at $79.80. Set Stop Loss at $89.10.

This forecast is valid from June 16 till June 23, 2026.