WTI hits three-week high as Iran deadlock supports Oil

• US Oil reaches a fresh three-week high, supported by persistent concerns over global supply.
• Donald Trump threatens severe economic consequences for countries providing support to Iran.
• Qatar sees the Iran-Oman agreement as a preliminary step toward renewed negotiations with Washington.

West Texas Intermediate (WTI) US Oil rises 1.89% on Thursday and trades around $85.85 at the time of writing, after reaching a fresh three-week high at $87.38 earlier in the day. Oil prices remain supported by disruptions to global energy supplies and the lack of a diplomatic breakthrough between Washington and Tehran.

WTI benefits in particular from concerns surrounding the closure of the Strait of Hormuz and the Bab el-Mandeb Strait. According to available information, the two waterways together account for around 27% of global energy supply, maintaining a significant risk premium in Oil prices.

The prospect of a rapid normalization in supply remains limited as United States (US) President Donald Trump steps up economic pressure on Iran. The US President warns that countries allowing their financial institutions, businesses, airports or government entities to provide economic support to Tehran could face severe economic consequences.

Trump specifically calls for an end to Oil smuggling, swap lines, cash transfers and other mechanisms that could support the Iranian economy. Washington's tougher stance is therefore fueling fears that the Strait of Hormuz could remain closed for longer, keeping risks to global energy flows elevated.

On the diplomatic front, however, Qatar believes that talks between Iran and Oman over the management of the Strait of Hormuz could represent an important step before a potential resumption of dialogue between the United States and Iran.

Qatar's Foreign Ministry spokesperson Majed Al-Ansari said on Tuesday that discussions between Iran and Oman had become a key step toward restarting a broader diplomatic process. Progress on this issue could pave the way for Washington and Tehran to return to the negotiating table, but the lack of an immediate agreement continues to support WTI for now.

WTI US Oil technical analysis

In the one-hour chart, WTI US Oil trades at $85.81, retaining a bullish near-term bias as price holds above the 100-period simple moving average (SMA) at $83.52 and the 200-period SMA at $82.26. The cluster of nearby horizontal levels, with initial support just beneath at $85.65 and $85.00, suggests a well-supported market, while the Relative Strength Index (14) around 57 keeps momentum in positive but not overbought territory.

On the downside, immediate support is seen at $85.65, followed by $85.00, with deeper demand levels emerging at $83.70 and the $83.52 and $82.26 SMAs reinforcing the broader uptrend if a larger pullback unfolds. On the topside, the next significant resistance stands at $87.38, and a sustained break above this barrier would likely open the way to further gains as bullish momentum extends.

(The technical analysis of this story was written with the help of an AI tool. Know more.)