Iran's ambassador to Moscow, Kazem Jalali, announced that the Strait of Hormuz will remain open but under new conditions, including the introduction of transit fees to be determined by Iranian and Omani authorities. Jalali stated, 'Of course, this strait will be open, but with new conditions to be determined by the Iranian and Omani authorities,' and added that fees will be charged for services provided by Iran and Oman [1]. This development comes amid renewed hostilities in the Gulf region, with reports of Israeli strikes on military targets in western and central Iran following Iran's ballistic missile attacks on Israel's Ramat David air base. Additional military actions in southern Lebanon and northern Iraq have heightened fears of a broader regional conflict, threatening a fragile cease-fire and dampening hopes for a resolution to a three-month-old war [2].
The effective closure and new transit conditions for the Strait of Hormuz have been identified as key factors supporting crude oil prices. At the time of reporting, West Texas Intermediate (WTI) crude oil is up 4.60% on the day, trading at $92.65 [1]. WTI has snapped a two-day losing streak and is maintaining gains near the $92.00 mark during the Asian session [2]. Technical analysis indicates that WTI remains capped below the 200-period Simple Moving Average (SMA) on the 4-hour chart, with the MACD indicator slightly negative, suggesting bearish momentum is not yet exhausted. The RSI near 56 shows modest positive bias, but bulls would need to reclaim the pivotal resistance at $95.38 to ease downside pressure [2].
On the downside, immediate support is seen between $86.50 and $86.00, and a break below this range could expose WTI to renewed selling toward sub-$81.00 levels, or the April monthly swing low [2].
The market reaction to the news has been significant, with WTI oil prices rising sharply. The combination of geopolitical tensions and changes to transit conditions in the Strait of Hormuz has increased concerns about supply disruptions, contributing to the bullish momentum in oil markets [1][2].
CONCLUSION
The announcement of new transit fees for the Strait of Hormuz, coupled with escalating Gulf tensions, has driven WTI crude oil prices higher, reflecting heightened supply concerns. Technical indicators suggest resistance remains, but the market is responding strongly to geopolitical risks and potential disruptions. Investors should monitor developments in the region and technical levels for further price direction.