WTI front-month futures fell about 5.8% to test the $75 area, a 15-week low, as trading pivoted on talk of a US–Iran memorandum of understanding that could lift the US naval blockade and reopen the Strait of Hormuz. Brent’s August contract tracked the move, slipping below $79 for the first time under $80 since March. The text remains unseen and unsigned, and Washington and Tehran have given differing accounts; the draft is described as pairing blockade relief with caps on Iran’s nuclear work and the release of frozen assets, while deferring harder issues into a 60-day follow-on. Earlier diplomacy deteriorated, with a spring breakdown feeding into the blockade that remains largely in place.
Markets now face a dense calendar, led by the FOMC decision at 18:00 GMT, where a 3.50% to 3.75% hold is priced at roughly 97% on CME FedWatch, alongside the EIA inventory report at 14:30 GMT and the IEA’s monthly update. Technically, WTI has closed below its 200-day EMA near $78.50 and pushed through $76 towards $75; the 50-day EMA sits near $90. Stoch RSI readings were cited near 12 intraday and around 28 on the daily measure, with support at $75 and resistance at $76, $78.50 and $80, while a break below $75 was framed as opening the low $70s and then the mid-$60s.
Market Reaction to US–Iran Peace Deal Rumors
We are seeing West Texas Intermediate crude oil in a freefall, breaking below its 200-day moving average and testing the $75 per barrel mark. This sell-off is happening because the market is betting a US-Iran peace deal is imminent, which would release sanctioned Iranian oil onto the global market. The conviction is strong, even though no deal has been officially signed and no new supply has actually started flowing.
The market is selling the rumor, and we have to respect that momentum, but the situation is fragile. Data from the CFTC shows that in the week ending June 9th, 2026, money managers increased their net short positions in WTI futures and options by over 15%, indicating speculators are heavily driving this move. This is happening despite recent history this year where similar peace talks have collapsed, making this a high-risk trade based purely on headlines.
Options Strategies and Upcoming Event Risks
We should use this volatility to our advantage through options, as the binary outcome of the deal presents a clear risk of a price snap-back. History shows this kind of sell-off is possible; when the original Iran nuclear deal (JCPOA) was implemented in early 2016, it contributed to oil prices falling below $30 a barrel. Given that WTI has broken significant technical support, buying put options or establishing bear put spreads with targets in the low $70s or even high $60s seems like the most logical way to ride this downward momentum.
Tomorrow brings a critical day of event risk with the Federal Reserve’s interest rate decision and the weekly EIA inventory report. Last week’s EIA report showed a surprise crude build of 1.2 million barrels, and if we see another build, it will add to demand concerns and could push prices through the $75 support level. A hawkish stance from the Fed would also strengthen the US Dollar, creating another headwind for crude prices.
Given the deeply oversold short-term conditions, the largest risk to a short position is the deal falling apart before Friday’s signing ceremony. A failed deal would likely cause a violent rally back toward the $80 level as the war premium is rapidly priced back in. For this reason, we should consider hedging our bearish positions with cheap, out-of-the-money call options or be prepared to exit shorts quickly if headlines suggest the talks are faltering.
