WTI Crude Falls Below $80 as US-Iran Deal Hits Oil Drop

Key Moments

Deal Progress on Hormuz Sends WTI Sharply Lower

West Texas Intermediate (WTI) crude futures on the NYMEX are trading more than 4% lower around $79.50 in the European session on Monday, with sellers firmly in control. The move follows United States (US) President Donald Trump’s announcement that the Strait of Hormuz, a key route for nearly 20% of global energy flows, will be reopened after the finalization of a memorandum of understanding (MoU) with Iran, scheduled to be signed on June 19 in Switzerland.

In a post on Truth Social on Sunday, President Trump stated, “I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade.”

The prospective reopening marks a sharp shift from the earlier escalation, when Iran shut the Strait of Hormuz, driving a substantial spike in oil prices as Tehran demanded acknowledgment of its authority over the passage.

Iranian Timetable and Blockade Removal

There appears to be a gap between the U.S. announcement and Tehran’s stated timeline. According to Iranian Mehr News Agency, the reopening of the Strait is expected to occur within 30 days “under Iranian arrangements.” Seatrade Maritime News also reported that the U.S. blockade of Iran would be lifted within the same 30-day period.

This staggered, 30-day implementation window is tempering immediate supply expectations, even as financial markets react swiftly to the prospect of normalized traffic through one of the world’s most strategic energy corridors.

Infrastructure Damage Limits Downside Potential

Oil prices surged at the onset of the conflict when Iran closed the Strait of Hormuz, tightening supply and increasing geopolitical risk premiums. While WTI has since given back a portion of those gains amid optimism around the emerging agreement, some market participants remain skeptical that the downturn in prices can be sustained.

Analysts point to damage inflicted on Middle East energy infrastructure during exchanges of attacks involving the US-Israel side and Iran, suggesting that structural supply constraints may linger even if shipping lanes reopen and sanctions are eased.

ANZ analysts, cited by Reuters, noted, “You may see (oil) break $80 on just, you know, happy days today…but then maybe the market will realize that, oh, wait a minute, maybe the terms of the deal may not be as lucrative. We also think that oil prices will remain a little bit on the higher side only because infrastructure has been damaged.”

WTI Technical Picture: Bearish Tone Intensifies

At press time, WTI US Oil is trading near $79.50, with short-term technical signals leaning clearly bearish. The price is holding well below the 20-day Exponential Moving Average (EMA) at $89.44, reflecting persistent overhead supply after the recent sharp downturn.

The Relative Strength Index (RSI) has weakened to 34.84, indicating that downward momentum remains in force and could strengthen further if selling persists.

On the upside, the 20-day EMA at $89.44 is viewed as the first meaningful resistance zone. A recovery above this dynamic barrier would be required to soften the immediate bearish bias and pave the way for a deeper corrective rebound. On the downside, a clear move below the April 17 low at $78.88 could open the path toward the March 10 low at $75.95, followed by additional support at $70.00 and then the February 27 high at $67.74, which is identified as the pre-war level.