Recent developments surrounding the Strait of Hormuz have once again become a major focus for the global energy market. Although Iran announced that the strategic waterway has been closed again, shipping activity through the Strait of Hormuz had already declined significantly following the escalation of geopolitical tensions.
Before the conflict, around 100–120 oil tankers per day passed through this critical route. However, current shipping activity remains well below normal levels as vessel operators continue to assess security risks, geopolitical uncertainty, and the lack of restored war-risk insurance coverage for most fleets.
This situation creates two major scenarios for the oil market:
- Bullish scenario: If tensions escalate again or there is a real disruption to oil distribution from the Middle East, prices could receive additional support from a rising geopolitical risk premium.
- Bearish scenario: If regional stability improves and shipping activity gradually returns to normal, oil prices could face downward pressure as the market begins to price in the recovery of global supply flows.
Although the reopening of shipping routes could reduce concerns over supply disruptions, the normalization process is unlikely to happen immediately. The market still requires greater certainty regarding security conditions, insurance coverage, and the smooth flow of exports before oil supply activity can fully return to normal levels.
Technical Analysis
Weekly
On the weekly timeframe, USOIL is currently trading around a resistance-turned-support zone, which aligns with the 200 SMA as dynamic support and an unmitigated imbalance area.
The previous weekly candle close is a key factor in determining the next potential direction. Price managed to maintain its position above the previous low and did not close below the 200 SMA.
This indicates that as long as price continues to hold above the 200 SMA, the bullish structure still has room to develop. In the short term, USOIL maintains the potential for a rebound, especially if supported by favorable fundamental catalysts.
USOIL Daily
On the daily timeframe, price remains around the dynamic support area of the 200 SMA. This level is important as it serves as a key indicator for identifying potential changes in the broader trend structure.
As long as price holds above the 200 SMA, buying pressure still has the potential to emerge. However, if a breakdown occurs and the daily candle closes below this level, the risk of further downside will increase.
USOIL 4H
On the 4H timeframe, the main focus is on the confluence area between:
- Trendline resistance
- Fibonacci retracement level
- 200 SMA as dynamic resistance
If price successfully breaks out and maintains its position above this confluence area, USOIL has the potential to continue higher toward the next resistance zone.
Conversely, if a strong rejection occurs at this confluence area, price could experience renewed selling pressure with the possibility of retesting previous support levels.
Conclusion
Overall, USOIL is currently positioned in a decision area, where both technical factors and geopolitical developments will play a significant role in determining the next market direction.
From a technical perspective, the price structure still provides a bullish opportunity as long as USOIL remains above the 200 SMA on higher timeframes. However, developments surrounding the Strait of Hormuz remain a key risk factor that could significantly increase market volatility.
At this stage, the 4H resistance zone remains the key level to watch. A breakout above this area could open the possibility of further upside, while a rejection could signal that bearish pressure remains dominant.
Disclaimer: This analysis is based on current technical analysis and available fundamental information and should not be considered as trading advice or a recommendation. Market conditions can change at any time due to economic developments, geopolitical events, and shifts in market sentiment. Always apply proper risk management in every trading decision.
