WTI crude fell early on Tuesday after President Trump said he had called off a strike on Iran at the request of Persian Gulf allies. The front-month contract briefly traded near $101 before rebounding, and it closed above $103 for a 1.30% gain.
During the European session, Trump described the pause as a delay and set a 2–3 day window for the next decision. Iran’s Deputy Foreign Minister said Iran is prepared to confront military aggression.
Strait Of Hormuz Supply Shock
The Strait of Hormuz remained effectively closed more than two weeks after the conflict’s operational phase ended on May 5. Tanker traffic stayed in single digits per day, versus a pre-war level above 120.
NATO said it would consider a deployment if the strait is not open by July. This added a deadline to the outlook for supply disruption.
The API reported a 9.1 million barrel crude stock draw versus a 3.4 million barrel consensus. The prior week was -2.188 million, and the disruption was described as removing about 10 to 12 million barrels a day from world markets.
WTI traded above the 50-day EMA near $90 and the 200-day EMA. Chart reference levels included $108 and a March peak above $113.
Technical Levels And Market Setup
We are seeing a familiar pattern that recalls the extreme volatility of the Hormuz crisis in 2025. Last year, we watched West Texas Intermediate (WTI) plunge toward $101 on de-escalation rumors only to rocket back above $103 within hours on hawkish rhetoric and a massive inventory draw. This taught us that in a tight market, the underlying supply situation has the final say over fleeting headlines.
The current geopolitical tensions are a clear echo of the brinkmanship we witnessed last year between Washington and Tehran. While the players may have changed, the playbook of tactical delays and defiant statements feels the same, keeping a significant risk premium baked into the price. We learned in 2025 that talk of de-escalation should not be trusted until tanker traffic normalizes, a lesson that applies directly to today’s fragile situation in the Red Sea, where daily vessel transits are still down over 50% year-over-year.
This tense backdrop is being reinforced by tightening fundamental data, just as it was in 2025. The latest Energy Information Administration (EIA) report for the week ending May 15, 2026, showed another crude inventory draw of 2.5 million barrels, surprising analysts who expected a slight build. This follows a trend of steady draws since April, confirming that global demand is outpacing the rerouted supply, much like the shocking API prints did during last year’s crisis.
From a technical standpoint, the chart continues to favor higher prices, with WTI holding firmly above its 50-day moving average. Last year, that same moving average, then near $90, served as a powerful floor for every dip, and we see a similar dynamic playing out now around the $82 level. As long as this support holds, the path of least resistance points toward retesting the recent highs near $90, mirroring the setup from 2025 before the push toward $108.
For derivative traders, the lesson from last year is to be cautious about betting against the prevailing trend on the basis of political noise. The real downside catalyst would be a confirmed resolution that reopens key shipping lanes, a signal that does not yet exist. The smarter play is to use options to position for continued volatility and potential upside, as the fundamental and geopolitical catalysts that are already here outweigh the hope of a peaceful breakthrough.
