Oil prices fell Monday amid rising optimism over US-Iran negotiations. Mediators reported progress after a marathon session in Switzerland, with Iranian senior envoys departing talks while conditions were set for further discussions aiming at a long-term settlement within 60 days. This follows last week’s signing of a memorandum of understanding that laid groundwork for addressing core issues including Iran’s nuclear programme.
The focus remains on fully reopening the vital Hormuz chokepoint after nearly four months of severe disruptions. Full normalization of shipping, including clearing potential mines and managing a backlog of stranded vessels, is expected to take weeks to months. Markets appear to be front-running the best-case outcome, pricing in reduced geopolitical risk premium.
Technicals confirm the bearish trend as the WTI crude price has sustained breaks below prior support, now trading in early-war territory. Resistance sits at $80–$82, and immediate support near $72, with deeper potential toward $70 if the roadmap advances smoothly.
Trade analysis
Short-dated contracts continue to reflect high volatility in the $70–$75 bracket as sentiment around diplomacy still drives price action.
Bullish ($70 or higher) signals:
- Setbacks in the 60-day roadmap or disputes over nuclear issues
- Renewed military incidents or delays in Hormuz reopening
Bearish ($70 or lower) signals:
- Accelerated progress toward final agreement with visible tanker traffic resumption
- Successful lifting of blockades and sanctions with minimal friction
The strategy now is to continue to fade short-term relief rallies into $75 on optimistic headlines lacking concrete implementation details, while selectively buying dips toward $70 on signs of negotiation breakdown. The base case for late June is further consolidation in the $70 zone with mild downside bias as markets digest the diplomatic process and stay wary of any political hiccups.