Go short on Brent crude as Strait of Hormuz reopens

Brent crude is currently caught in a triple whammy: a shrinking geopolitical risk premium, a slow but steady resumption of shipments through the Strait of Hormuz, and a bleak demand outlook. Over the past week, prices have taken a beating, now trading around $78.00 per barrel. What triggered this? Tentative progress in US-Iran negotiations and early signs that tankers are navigating the waterway again. With a few vessels already having passed through, the market has begun to discount shortage fears, leaving sellers firmly in the driver's seat.

The big question now is how quickly flows will normalize. If traffic picks up steadily—and the fragile US-Iran dialogue doesn't fall apart—Brent could remain under relentless pressure. Adding to the bearish cocktail, Washington handed out temporary waivers on Iranian oil, raising the odds of a supply swell. But don't hold your breath. A full-scale recovery is far from being guaranteed, with trust between the two sides still hanging by a thread. Any new rhetoric about shipping risks could swiftly snap the geopolitical premium back into place.

Demand isn't doing oil any favors, either. OPEC's latest monthly report cut its 2026 growth forecast once again, underscoring a more cautious consumption outlook. The International Energy Agency (IEA) is on the same page, pointing to waning fuel appetite and the threat of a supply overhang. Anyway, it admits that the rebound could be sluggish, given the political and logistical bottlenecks, which are at play.

Where does this leave us? The fundamental landscape for Brent crude is tilted heavily to the downside. Between the evaporating risk premium, looming supply waves, and a dimming demand horizon, the path of least resistance looks lower. The next big floor to watch is the $70.00 psychological threshold.

The final recommendation:

— Sell Brent crude at the current price, aiming to reach $70.00 per barrel within one week.

— To shield your position from adverse market movements, place a Stop Loss order just above resistance, at $81.50.