Can Brent crude price break resistance as US-Iran tensions threaten Hormuz supply?

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Brent crude gains 1.42% to $86.05

Highlights

Rising US-Iran tensions in the Strait of Hormuz are increasing the geopolitical risk premium for Brent crude due to possible supply disruptions.
Concerns over potential route blockages have driven additional hedging and speculative buying by market participants seeking protection against tightened supply.
Brent trades with a bullish bias but is technically overbought, with the near-term expected to consolidate between $83.75 and $88.35 barring major breakouts.

Geopolitical risk premium rises as Strait of Hormuz tensions mount

Escalating tensions between the US and Iran in the Strait of Hormuz are raising the risk premium on Brent crude, according to Cappnotes Substack. As this region is a vital chokepoint for global oil transit, increased geopolitical risk has driven market participants to price in potential supply disruptions. These concerns are attracting additional buying interest as traders seek to hedge against possible route blockages or tightened supply.

Upside bias holds as technical support steadies amid mixed signals

On the technical front, XBR is trading above its MA-20 ($84.86) and MA-50 ($84.9) on the hourly chart, as well as the MA-200 ($81.95) on the daily timeframe. The Ichimoku Kijun level at $84.99 now acts as immediate support. Momentum signals are mixed: the Moving Average Convergence Divergence (MACD) points to further upside while the Average Directional Index (ADX) remains neutral, indicating that trend strength is not especially strong. The Relative Strength Index (RSI) stands at 62.14, placing it in buy territory, with both the Stochastic RSI and Commodity Channel Index (CCI) displaying overbought readings. Bull/Bear Power is overbought, signaling buyer dominance in intraday trading, while the Awesome Oscillator remains neutral, giving no additional confirmation to the upward move.

Price consolidation likely as volatility bands frame breakout risks

Over the next two to three sessions, XBR is projected to range between $83.75 and $88.35, reflecting the established volatility band relative to current levels. There is a 71% probability of an upward move, with a less likely 29% chance of a correction toward support. The baseline scenario anticipates price consolidation within the stated corridor, with a potential bullish breakout to higher resistance if the upper limit is breached or a downside scenario toward $83.75 if the Kijun support fails.

Anton Kharitonov, expert at Traders Union, sees Brent crude supported by both geopolitical tensions and bullish technical structure. He notes momentum signals are mixed, with overbought conditions and only moderate trend strength. The price needs to consolidate above the Kijun support for sustained upside. "With risk premium driving the move, my base case is consolidation in the $83.75–$88.35 range, but any break below support would shift the outlook to defensive."

Earlier, analysts noted that escalating U.S.-Iran tensions were fueling a risk premium in oil markets and driving Brent prices higher amid heightened geopolitical uncertainty. With current technicals pointing to sustained buyer interest, traders should watch for a potential bullish breakout above the established volatility band as Brent consolidates at elevated levels.

Source of Data: XBR Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.