Brent Crude Tests $100 as Hormuz Risk and Supply Recovery Drive Extreme Volatility

Brent crude is trading around $99 per barrel, down roughly 3%, after moving as high as $105 during the latest period of heightened volatility. The sharp swings highlight a market struggling to establish a clear direction as traders balance improving physical supply signals against persistent geopolitical risks surrounding the Iran conflict and the Strait of Hormuz.

The latest price action suggests that oil markets remain highly sensitive to individual headlines. Saudi Arabia’s crude shipments have recovered strongly following attacks on its East-West pipeline, with exports reaching their highest levels since the beginning of the Iran war. The improvement is easing immediate concerns about a severe supply crunch and suggests that crude flows through the Strait of Hormuz may be becoming less disrupted.

However, the speed of recent price movements means traders are reluctant to establish a lasting trend based on a single supply development. Brent remains caught between expectations of improving availability and the possibility of another geopolitical escalation.

Market Snapshot

Current Brent Crude Price Action

Brent has fallen back toward the $100 level after reaching $105, with the market now testing its short-term moving average at $99.59.

This is an important technical level. A sustained break below $99.59 would increase the possibility of further downside and could encourage traders to target the lower portion of the established medium-term range.

However, the psychological importance of $100 could make this area difficult to break decisively. Geopolitical risk remains elevated, and the absence of a ceasefire between the US and Iran means traders may remain reluctant to push crude substantially lower while the possibility of renewed supply disruption remains.

Saudi Crude Shipments Ease Supply Crunch Concerns

Saudi Arabia is providing an important stabilising signal for the physical oil market.

Crude shipments from the world’s largest oil producer have recovered following the East-West pipeline attacks and have reached their highest levels since the start of the Iran war. The recovery reduces immediate concerns that the attacks will create a prolonged disruption to Saudi export flows.

Improving shipments also suggest that transportation through the broader regional supply network is becoming more functional. If this trend continues, some of the geopolitical premium embedded in crude prices could gradually unwind.

The key uncertainty is whether the improvement represents a lasting normalisation of supply flows or simply a temporary recovery before another disruption.

Strait of Hormuz Remains the Critical Supply Risk

The Strait of Hormuz remains central to the oil outlook.

Any sustained improvement in tanker movements and crude transit through the waterway would reduce fears of a global supply shortage and could place additional pressure on Brent.

However, the strategic importance of the route means that any renewed attacks on shipping or restrictions on transit could rapidly reverse the recent improvement in sentiment.

This creates an unusually asymmetric headline risk: improving flows can remove part of the geopolitical premium, while a fresh disruption could quickly restore it.

Technical Outlook: $99.59 Support in Focus

Brent is currently testing the $99.59 short-term moving average, making this one of the most important levels for near-term price direction.

A decisive break below this level would weaken the short-term technical structure and potentially expose the market to further losses.

At the same time, the moving average could act as sticky support because traders remain cautious about pushing crude significantly below $100 while geopolitical uncertainty remains elevated.

The longer-term moving average sits around $103.60, creating a significant resistance area above the current market.

Brent Remains Inside a Broad Medium-Term Range

Despite the extreme short-term volatility, Brent remains within a medium-term range of approximately $94.40 to $110.40.

The current structure does not yet provide a strong technical signal that the market is preparing to break decisively above or below this range.

The RSI is also relatively neutral, supporting the possibility that Brent remains range-bound while traders wait for a clearer fundamental catalyst.

A move through either edge of the range would therefore represent a much more significant technical development than the day-to-day fluctuations currently dominating the market.

Bullish Sentiment

1. Persistent Middle East geopolitical risk: The lack of a ceasefire between the US and Iran keeps the possibility of further supply disruption elevated.
2. Strait of Hormuz exposure: Any renewed targeting of vessels or deterioration in transit conditions could rapidly tighten global crude availability.
3. $100 psychological support: Brent’s proximity to the $100 level could encourage buying interest if traders remain concerned about geopolitical escalation.
4. Upside technical risk: A recovery through the $103.60 longer-term moving average would strengthen the technical case for a move toward the upper part of the established range.
5. Escalation scenario: A significant deterioration in the conflict or renewed disruption to shipping could push Brent back toward the $110.40 upper boundary.

Bearish Sentiment

1. Saudi supply recovery: Higher Saudi crude shipments are reducing immediate concerns about a severe supply shortage.
2. Improving Hormuz transit: Easier crude movements through the Strait could remove part of the geopolitical premium from oil prices.
3. Technical pressure below $100: A sustained break beneath the $99.59 moving average would increase the risk of further downside.
4. Ceasefire risk: Any meaningful ceasefire between the US and Iran could trigger a rapid reduction in geopolitical risk premium.
5. Range resistance: Brent remains well below the $103.60 longer-term moving average, while the broader $94.40–$110.40 range continues to contain price action.

Price Forecast: What Traders Are Watching

The immediate focus is the $99.59 support level.

If Brent holds this level, traders could continue to treat the current decline as a correction within the broader range, particularly while geopolitical risk remains elevated.

A sustained move below $99.59 would strengthen the case for a test of lower support within the $94.40–$110.40 range.

On the upside, Brent needs to reclaim $103.60 to improve the technical structure. A sustained break above that level could shift attention toward the upper portion of the range and eventually the $110.40 boundary.

The largest fundamental catalyst remains the US-Iran conflict. A ceasefire could significantly reduce the geopolitical premium and create conditions for Brent to move below $90, while a major escalation or renewed attacks on vessels around the Strait of Hormuz could push prices back toward $110.

Supply Outlook

The near-term supply outlook is improving at the margin as Saudi crude shipments recover and transit conditions appear to be becoming less restrictive.

That improvement could help prevent a sustained supply deficit if the recovery continues. However, the market remains vulnerable to sudden disruptions because of the concentration of global energy flows around the Strait of Hormuz.

The key distinction for traders is therefore between normalising supply flows and sustainable supply security. Current evidence points toward improving flows, but geopolitical conditions remain capable of changing that picture quickly.

Demand Outlook

Global oil demand remains an important secondary factor while geopolitical developments dominate short-term pricing.

If crude remains around $100 or above for an extended period, elevated energy costs could eventually weigh on fuel consumption and economic activity. Conversely, a sharp decline in oil prices following a reduction in geopolitical risk could improve the outlook for consumers and energy-intensive industries.

For now, however, changes in physical supply and geopolitical risk are likely to have a greater immediate influence on Brent than incremental changes in demand expectations.

Market Outlook for the Coming Sessions

Brent remains locked between two opposing forces.

Improving Saudi shipments and signs of easier Strait of Hormuz transit are reducing immediate supply-crunch concerns, while the unresolved US-Iran conflict continues to provide a substantial geopolitical risk premium.

Technically, $99.59 is the first major level to watch, followed by the $94.40 lower boundary of the medium-term range. On the upside, $103.60 is the key longer-term moving average, followed by the $110.40 range ceiling.

Until one of these levels is decisively broken, Brent could remain highly volatile but broadly range-bound.

The coming sessions are likely to be driven by three developments: US-Iran negotiations, the security of shipping through the Strait of Hormuz, and evidence that Saudi and regional crude flows can remain stable.

Currency Hedger View

For companies with significant USD, oil or energy-related exposure, the current Brent volatility creates a challenging currency and cash-flow environment.

A sustained move above $100 can increase energy costs and influence inflation, interest-rate expectations and ultimately currency markets. Conversely, a sharp decline in crude following a ceasefire could rapidly change the cost environment for energy importers and exporters.

Currency Hedger monitors the relationship between energy markets, currencies, interest rates and geopolitical developments, helping businesses assess FX exposure alongside the wider macroeconomic environment.

Currency Hedger

Analysis Louis Roche – Today Markets

Brent crude remains highly headline-sensitive, with the market unable to establish a durable directional trend while improving supply flows compete with persistent geopolitical risk.

The $99.59 short-term moving average is the immediate technical test. Holding above it would keep the broader range structure intact, while a sustained break could expose Brent to the lower end of the $94.40–$110.40 range.

Above the market, $103.60 remains the key resistance zone. A meaningful geopolitical escalation could push Brent toward $110.40, while a credible US-Iran ceasefire could remove a significant portion of the current risk premium and open the way toward substantially lower prices.

Louis Roche – Today Markets