Oil gives up early gains on signs of US de‑escalation

Oil markets swing sharply on fresh Middle East developments

As we enter the second month of the conflict in Iran, oil markets continue to ride a wave of headline-driven volatility, with ripples felt across most asset classes.

This morning brought another sharp swing: reports that Iran struck a fully laden Kuwaiti oil tanker, the Al-Salmi, off Dubai triggered an immediate spike, pushing WTI crude oil as high as US$106.86 in early trade. The price has since reversed lower to trade around US$102.10 (-0.77%), following headlines that President Trump has told aides he is willing to end the US military campaign against Iran even if the Strait of Hormuz remains largely closed.

Political pressure builds as fuel prices rise

According to administration officials, a full-scale mission to forcibly reopen the chokepoint would push the conflict well beyond Trump’s preferred four – six week timeline. Instead, the focus will shift to weakening Iran’s navy and missile capabilities before winding down hostilities, while continuing to apply diplomatic pressure on Tehran to restore free trade through the Strait. If that fails, Washington will leave Europe and the Gulf to take the lead on reopening the waterway, presumably either by negotiation or by force.

This latest sign of de-escalation comes as US retail gasoline prices climb above US$4 per gallon for the first time since August 2022. These rising fuel prices have coincided with a sharp decline in Trump’s approval rating, which now sits around 36%. This electoral reality is undoubtedly weighing heavily on the Trump administration’s mind ahead of the November midterms, where a Democrat takeover of the House could significantly hinder his ability to pass new laws in the final two years of his term.

While markets will no doubt debate the merits of this latest de-escalation, and before throwing caution to the wind, it might pay to keep a recent tweet from Iran’s parliament speaker Mohammad Bagher Ghalibaf in mind. Referring to the US administration, he said: ‘If they pump it, short it. If they dump it, go long.’

While Trump’s desire to wind down the campaign quickly is understandable, the decision to defer the reopening of the Strait of Hormuz leaves a critical chokepoint firmly in Tehran’s hands for the foreseeable future. Unfortunately, this also pushes back any concrete resolution regarding the Strait’s reopening, extending the uncertainty weighing on markets and the broader global economy.

WTI crude oil technical analysis

At the beginning of March, WTI crude oil finally broke out of its long-standing US$55 – US$65 slumber, surging to hit a high of US$119.48 on 9 March before promptly rejecting that level.

Since then, the price action has been volatile. It has tested support near US$75, from which it bounced sharply, only to then find the air too thin for its liking above US$100, a level it appears to be shaping to reject again.

Looking ahead, we think this type of whippy price action is set to continue and expect WTI to keep trading within a wide and choppy range between US$75 support and US$105 resistance, as has been our base case since 10 March.

Be aware that should WTI crude oil see a sustained break above resistance at US$105 – US$106, it would warn that a retest of resistance near US$120 is underway.

WTI crude oil daily candlestick chart

• _{Source: TradingView. The figures stated are as of  31 March 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.}