West Texas Intermediate (WTI) crude oil futures on NYMEX rose by 1% to trade near $69.40 during the European session on Tuesday, following reports that Iran attacked at least two commercial ships in the Strait of Hormuz, a critical passage for nearly one-fifth of the world's energy supply [1]. According to Axios, Iran fired at least two missiles at the vessels, and Bloomberg reported that both ships suffered significant damage, though no casualties occurred [1].
Despite the renewed fears of supply disruptions, the market reaction has been relatively muted. The impact is expected to be limited, as the United States has not issued any official response, indicating that the ceasefire with Iran remains in place [1]. However, tensions persist, with US President Donald Trump threatening to attack Iranian infrastructure if a deal is not finalized soon, while Iran's Foreign Minister Abbas Araghchi warned that negotiations would not proceed under continued threats [1].
On the supply side, OPEC+ announced an increase in overall oil output, which has added to global supply and exerted downward pressure on oil prices [1]. Technically, WTI remains in a bearish near-term trend, trading well below the 20-day Exponential Moving Average (EMA) at $74.27, with the Relative Strength Index (RSI) at 31.79, just above oversold territory [1]. Immediate resistance is seen at $70.00 and the 20-day EMA, while a break below the July 2 low at $67.09 could trigger further declines toward the February 26 low at $63.58 [1].
Overall, while geopolitical tensions have provided a short-term boost to prices, the prevailing bearish momentum and increased supply from OPEC+ continue to weigh on the market outlook [1].
CONCLUSION
WTI oil prices saw a modest uptick following reports of Iranian attacks on commercial ships, but the overall market sentiment remains bearish due to increased OPEC+ supply and technical indicators. Unless prices hold above key support levels, further downside is likely, with geopolitical risks offering only limited short-term support.