West Texas Intermediate crude slipped to $93 on Friday as traders weighed reports that Washington and Tehran are exploring a phased reopening of the Strait of Hormuz. Brent, the international benchmark, eased to $105.65. The pullback, however, looks like a pause rather than a reversal, with supply constraints still dominating the market.
US-Iran talks: a fragile framework
According to Reuters, the two sides are discussing an arrangement similar to a previous Memorandum of Understanding. Under that model, Iran would pledge not to attack vessels transiting the strait, while the US would lift its blockade on Iranian ports. Such a deal would let Iran resume oil revenue and give the White House a chance to cool pump prices before the midterm elections.
Yet the odds of a breakthrough remain uncertain. Iranian demands are steep, and some officials believe that keeping oil prices elevated could hurt the administration politically. Prediction market Polymarket currently puts Democratic chances of winning the Senate at 63% and their odds of taking the House at 98%, suggesting that the political calculus may not favor a quick agreement.
Saudi pipeline restart adds supply hopes
Separately, reports indicate that Saudi Arabia has resumed operations on its East-West Pipeline, which runs to the Red Sea export hub of Yanbu. That move could add barrels to the market and ease some of the tightness. However, the Houthi movement still controls the Bab el-Mandeb Strait, where attacks on Saudi vessels have occurred, and the pipeline itself remains vulnerable to strikes from Iran, Iraqi militias, or the Houthis.
Traffic data tells a different story
Despite US assertions that millions of barrels are still moving through the Strait of Hormuz, vessel-tracking data shows only a handful of ships crossing. That discrepancy suggests that actual supply flows are far weaker than official statements imply, keeping the market on edge.
Technical outlook: bullish channel intact
On the daily chart, WTI has climbed from a July low near $67 to the current $93.12, forming an ascending channel. The price sits just above the lower boundary of that channel and has moved above the 50-day exponential moving average, as well as the Strong Pivot Reverse level on the Murrey Math Lines tool. The Supertrend indicator also points higher.
With the path of least resistance to the upside, the next key target is $106.70, the September 15 high. A break above that level could open the door to $110. Conversely, a drop below the lower channel line would invalidate the bullish setup.
This article is for informational purposes only and does not constitute financial advice.
