WTI crude oil price forecast: Oil drops below $90 as war premium starts to unwind

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WTI crude oil price forecast

Highlights

During peak geopolitical panic, WTI slides back below $90 after soaring for a moment toward $118.
Trump hints at more rapid-than-anticipated progress and potential tanker escorts through Hormuz.
The $87 to $92 range is now the major technical zone for the next directional move.

So far, that pullback suggests that the market is slowly but surely transitioning from panicking price speculation to a cautious assessment as to whether the disruption to the Strait of Hormuz is a permanent supply shock or a transient event.

Political language, coupled with policy expectations, drove the pullback. Traders are reacting to signs that Washington might act more aggressively to stabilize shipping flows and to contain the spike in oil, which would lessen the urgency of worst-case supply disruption scenarios. That said, supply risks haven’t completely disappeared, so the market remains extremely responsive to new news.

Risk premium cools as policy response takes shape

One of the reasons this has changed is an increasing belief that the immediate threat to supply is less severe than we initially imagined. President Donald Trump said the military action involving Iran may conclude sooner than anticipated.

He also mentioned that the U.S. Navy could assist escort tankers via the Strait of Hormuz, an important shipping route. He added the U.S. may consider lifting some oil sanctions to help stabilize supply. The G7 finance ministers confirmed that they are ready to release crude oil from their strategic reserves should conditions in the marketplace worsen. Taken together, these have eased some of the anxiety that fed Monday’s abrupt jump in price. But it’s worth noting the problem isn’t entirely over.

Production cuts and export disruptions in Saudi Arabia, the UAE, Kuwait, and Iraq continue to pressure the physical supply. We are also confronted with challenges with storage and shipping delays. But the market appears to be moving away from assuming the worst-case scenario is inevitable.

Charts point to consolidation after the spike

Technically, crude has shifted from a panic rally into a consolidation phase. The move to $118 now looks like a classic exhaustion spike, followed by a fast unwinding once speculative hedges began to reverse. On the one-hour chart, WTI is still holding above the rising 100 EMA near $87.2 and comfortably above the 200 EMA near $80.7, meaning the broader post-breakout structure has not yet broken down.

WTI price dynamics (Source: TradingView)

Now, the technical focus is on the $91.8 to $92 region, where the 20 EMA and 50 EMA are aligning together. As long as crude stays below that zone, short-term momentum signals more cooling or sideways trading. Should the price remain above $92 for a while, it means that buyers are taking the wheel once more and so would potentially push prices to $100 or even the $104 to $108 range.

On the downside, $87.2 is the first meaningful support. A break below that level would expose $84, the recent capitulation low, followed by the rising 200 EMA near $80.7.

As previously discussed, WTI had entered a crisis-driven breakout once prices cleared the upper range and the Hormuz disruption escalated. The difference now is that the market is trying to determine how much of that premium should remain in place. Until crude breaks out of the $87 to $92 band, the tape is likely to remain volatile but indecisive.

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