Crude oil rebounds as Strait of Hormuz tensions flare again

US-Iran agreement unravels as shipping risks re-emerge

The last leg of the crude oil sell-off that pushed prices below $80 began in mid-June and coincided with the United States (US) and Iran signing a memorandum of understanding (MOU) on 17 June.

The deal blindsided markets by allowing Tehran to resume oil sales immediately rather than through the protracted reopening process most had anticipated. For several weeks, the arrangement appeared to work. Iranian supply flowed steadily through the Strait of Hormuz, and by late last week, even the final trapped Japanese tankers had cleared the waterway.

However, some strains have since emerged. Over the weekend, eight vessels approaching the Strait on the Omani side turned back or altered course as Iran began to reassert its leverage over the waterway. This was followed yesterday by reports of three ships being attacked by Iran while traversing the Strait.

The attacks prompted the UK Maritime Trade Operations to raise the threat level in the Strait to ‘severe’. The US Treasury has since revoked the waiver that had allowed Iran to sell its oil, describing Iran’s actions as ‘wholly unacceptable’. Iran has pushed back strongly, telling the International Maritime Organization that parts of the Strait of Hormuz fall within its territorial waters and that it exercises sovereignty over them.

US strikes raise stakes for crude oil markets

This morning brought the expected American response: strikes targeting Iranian air-defence systems, coastal surveillance infrastructure, surface-to-air missiles, anti-ship cruise missile sites, drone facilities and port operations. US Central Command described the ‘powerful strikes’ as designed to ‘impose heavy costs for targeting and attacking commercial shipping crewed by innocent civilians in an international waterway’.

At the heart of the matter is that the MOU between the US and Iran included provisions aimed at reopening the Strait of Hormuz to commercial shipping, but it left important details on control and traffic management deliberately ambiguous.

Iran maintained that parts of the Strait fall within its territorial waters and that it exercises sovereignty over them, while the US position was that the Strait is an international waterway with rights of transit passage for all nations. This fundamental difference in interpretation was never fully resolved in the text of the agreement.

In practice, this led to an uneven reopening, with tankers resuming transits (often escorted or routed via the Omani side), but with Iran periodically asserting its leverage through warnings, inspections or direct actions when it felt its interests were being undermined.

In this context, it remains to be seen whether this morning’s US strikes bring a swift end to the latest escalation or whether Iran elects to continue flexing its leverage over the Strait with actions that fall short of triggering a broader conflict. At the very least, it will keep markets on edge and does suggest crude oil prices have based for now.

Crude oil technical analysis

The sharp sell-off since mid-June saw crude oil break below a critical band of support between $74.70 (the 200-week moving average) and $74 (the 200-day moving average) before bottoming at $67.04 last week.

The rapid decline took prices well into oversold territory, and the overnight bounce is helping to relieve some of that pressure.

At this stage, there is scope for the rebound to extend back towards the $75 resistance area, where sellers are likely to emerge. A sustained break above that level would be needed to negate the near-term downside risks and open the way for a stronger recovery towards the $79 - $80 zone.

Crude oil chart 

The figures stated are as of 8 July 2026. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.