Wednesday’s breakout above the 200-day moving average at $66.43 marked a bullish shift, turning that level into key support. However, the rally failed to challenge the April 2 peak of $71.17, stalling instead at resistance around $68.21. Traders may now look for a retest of the 200-day average as bulls regroup.
Middle East Risk Premium Fades as Traders Eye U.S.-Iran Talks
Prices initially climbed on Wednesday after reports confirmed the U.S. would partially evacuate diplomatic personnel from Iraq and Bahrain due to heightened regional tensions. President Trump emphasized the potential danger in the region, reaffirming U.S. opposition to Iran’s nuclear ambitions.
Yet by Thursday, the rally faded as traders weighed the possibility of de-escalation. The U.S. and Iran are scheduled to hold high-level talks on Sunday in Oman. U.S. Special Envoy Steve Witkoff will meet Iranian Foreign Minister Abbas Araghchi to discuss a potential deal on Iran’s nuclear activities.
Strait of Hormuz in Focus for OPEC Watchers
Oil traders remain focused on the Strait of Hormuz, a vital chokepoint for nearly 20% of global oil flows. Any disruption there could have a major supply impact. Global Risk Management analyst Arne Rasmussen warned that a closure would be a “nightmare” scenario for the oil market.
Britain’s maritime agency has issued cautionary guidance to vessels operating in the Gulf, Gulf of Oman, and the Strait of Hormuz, citing risk of military escalation. The situation is especially critical given Iraq’s role as the second-largest crude producer in OPEC.
Iranian Threats and U.N. Violation Add to Market Jitters
Iran’s Defense Minister has threatened to strike U.S. bases if talks fail, while President Trump continues to hint at possible military action. Meanwhile, the U.N. nuclear watchdog declared Iran in violation of non-proliferation rules, its first such ruling in nearly 20 years, raising the prospect of U.N. Security Council involvement.
