Brent – Iran says it will close Hormuz, so why is oil still near $78?

Over the weekend, the US-Iran peace talks broke down, and Iran announced it will close the Strait of Hormuz. This is the waterway where about 20% of the world's oil is shipped. News like that should send oil sharply higher. Instead, Brent trades near $78.60 today, barely above where it sat last week.

So why the calm？ Two reasons. First, the market has heard these threats before, and an announcement isn't the same as ships actually stopping. Traders want to see a real disruption, not words. Second, the big war premium already left the price last week, when oil dropped from above $120 to under $80 on hopes of peace.

But this calm can break fast. If tankers truly stop moving through the strait, a fifth of the world's oil supply is at risk, and prices can jump within hours. With oil sitting near its lows, the bigger danger now is a sudden move up, not down.

So today, the market is waiting for proof. Watch the Strait itself, not the headlines.

Brent key levels:

• Resistance $82, then $85.

• Support $77, then $74.

Watching: whether tankers actually stop in the Strait of Hormuz, US-Iran talks, and new US strike threats.

By Born2trade market research department

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