Oil prices ticked higher after a sharp selloff driven by hopes that the US and Iran might actually reach an agreement over the Strait of Hormuz.
The whipsaw that got us here
WTI futures dropped 5.5% when markets began speculating that a resolution between Washington and Tehran was within reach. Traders priced in the possibility that Iranian oil would flow more freely, easing supply constraints that have kept crude elevated.
When talks collapsed over the weekend, prices reversed violently. Brent surged 8.36% to $103.16 per barrel. WTI climbed 8.22% to $104.57. The catalyst was a US announcement of a blockade on the Strait of Hormuz.
For context, the Strait of Hormuz handles roughly a fifth of the world’s daily oil consumption.
