Crude oil trading alert: The resumption of air traffic over the Strait of Hormuz and expectations of easing tensions between the US and Iran have suppressed risk premiums, causing crude oil prices to fall back to around $70 and enter a pricing phase driven by oversupply.
2026-07-01 09:59:33
International crude oil prices continued their downward trend on Wednesday, as the market digested previous geopolitical risk premiums amid expectations of easing tensions between the US and Iran and a rapid return of supply. WTI crude oil rose about 0.26%, trading around $69.68, with the overall trend indicating that the market is shifting from "geopolitical drivers" to "supply and demand rebalancing."
From a geopolitical perspective, US-Iran relations remain in a complex phase of strategic maneuvering. The Iranian Foreign Ministry stated that it currently has no plans for any direct talks with the US, but may communicate with Qatar this week to discuss unfreezing assets and implementing existing memorandums of understanding. Meanwhile, Qatar confirmed that a US presidential envoy and other high-ranking officials have visited the country, but no direct negotiations have taken place with Iran, indicating that current diplomatic interactions remain at the level of indirect communication.
The market also noted that the Iranian parliament speaker mentioned that after the US partially lifts sanctions, Iran's oil exports could exceed the statistical level of 40 million barrels , and be sold at a premium of about 20% . While this statement carries some uncertainty, it has strengthened market expectations for a potential "supply repatriation."
Regarding geopolitical tensions, Israel's large-scale military operation in the West Bank means that risk factors in the Middle East have not completely subsided. However, the faster-than-expected recovery of shipping in the Strait of Hormuz has significantly reduced market concerns about supply disruptions, leading to a rapid reduction in risk premiums.
From a fundamental perspective, the core issue in the oil market has shifted from "supply disruption risk" to "supply surplus expectations." As more ships resume passage through the Strait of Hormuz, global crude oil transportation has returned to near-normal levels, and the market is beginning to reassess whether the alternative supply routes established during the war remain sustainable.
Several institutions have lowered their oil price forecasts, with some investment banks pointing out that the global market could re-enter a state of oversupply once traffic in the Strait of Hormuz recovers to approximately 65% of pre-war levels. These institutions also warn that over time, market pricing logic may gradually shift towards expectations of a long-term supply surplus by 2027.
From the demand side, the US travel season is about to enter its peak, but the market believes that demand growth will not be able to fully offset the pressure of rising supply, thus limiting the upward momentum of oil prices. An energy trader pointed out that against the backdrop of improved supply expectations, short-term buying interest has clearly weakened.
Overall, oil prices are undergoing a rebalancing process characterized by "rapidly receding geopolitical premiums + accelerated supply recovery + limited seasonal demand support," and the market volatility structure has clearly converged.
From a daily chart perspective, after a rapid decline following the earlier geopolitical shock, WTI crude oil has returned to its mid-term high-volume trading range, exhibiting an overall consolidation structure following a high-level pullback. The price has formed a short-term equilibrium point around $70 , indicating that the market is rebuilding a new price center. Resistance is concentrated around $72 ; failure to break through this level will continue to limit any upward movement. Key support lies around $69 ; a break below this level could open up further downside potential to the $67 area.
From a 4-hour chart perspective, oil prices have entered a sideways consolidation phase after a rapid decline, with short-term moving averages gradually flattening, indicating a near balance between bullish and bearish forces. Momentum indicators remain low, suggesting a lack of clear trend and more event-driven volatility. Current prices are fluctuating around $70, indicating the market is awaiting new supply/demand or geopolitical signals to redefine the trading range.
Editor's Summary : The current crude oil market is rapidly shifting from a geopolitical risk-driven phase to a supply and demand fundamentals-based pricing phase. The resumption of navigation in the Strait of Hormuz and indirect communication between the US and Iran have weakened expectations of supply disruptions, allowing previously accumulated risk premiums to continue to be released. With supply returning to normal faster than expected, oil prices have entered a phase of high-level fluctuation and rebalancing. If there is substantial progress in US-Iran negotiations, oil prices may face further downward pressure; however, if the geopolitical situation deteriorates again, it could reactivate risk premiums. Overall, short-term oil prices are expected to fluctuate within a range, while the medium-term trend will still depend on the pace of supply recovery and the resilience of global demand.
From a geopolitical perspective, US-Iran relations remain in a complex phase of strategic maneuvering. The Iranian Foreign Ministry stated that it currently has no plans for any direct talks with the US, but may communicate with Qatar this week to discuss unfreezing assets and implementing existing memorandums of understanding. Meanwhile, Qatar confirmed that a US presidential envoy and other high-ranking officials have visited the country, but no direct negotiations have taken place with Iran, indicating that current diplomatic interactions remain at the level of indirect communication.
The market also noted that the Iranian parliament speaker mentioned that after the US partially lifts sanctions, Iran's oil exports could exceed the statistical level of 40 million barrels , and be sold at a premium of about 20% . While this statement carries some uncertainty, it has strengthened market expectations for a potential "supply repatriation."
Regarding geopolitical tensions, Israel's large-scale military operation in the West Bank means that risk factors in the Middle East have not completely subsided. However, the faster-than-expected recovery of shipping in the Strait of Hormuz has significantly reduced market concerns about supply disruptions, leading to a rapid reduction in risk premiums.
From a fundamental perspective, the core issue in the oil market has shifted from "supply disruption risk" to "supply surplus expectations." As more ships resume passage through the Strait of Hormuz, global crude oil transportation has returned to near-normal levels, and the market is beginning to reassess whether the alternative supply routes established during the war remain sustainable.
Several institutions have lowered their oil price forecasts, with some investment banks pointing out that the global market could re-enter a state of oversupply once traffic in the Strait of Hormuz recovers to approximately 65% of pre-war levels. These institutions also warn that over time, market pricing logic may gradually shift towards expectations of a long-term supply surplus by 2027.
From the demand side, the US travel season is about to enter its peak, but the market believes that demand growth will not be able to fully offset the pressure of rising supply, thus limiting the upward momentum of oil prices. An energy trader pointed out that against the backdrop of improved supply expectations, short-term buying interest has clearly weakened.
Overall, oil prices are undergoing a rebalancing process characterized by "rapidly receding geopolitical premiums + accelerated supply recovery + limited seasonal demand support," and the market volatility structure has clearly converged.
From a daily chart perspective, after a rapid decline following the earlier geopolitical shock, WTI crude oil has returned to its mid-term high-volume trading range, exhibiting an overall consolidation structure following a high-level pullback. The price has formed a short-term equilibrium point around $70 , indicating that the market is rebuilding a new price center. Resistance is concentrated around $72 ; failure to break through this level will continue to limit any upward movement. Key support lies around $69 ; a break below this level could open up further downside potential to the $67 area.
From a 4-hour chart perspective, oil prices have entered a sideways consolidation phase after a rapid decline, with short-term moving averages gradually flattening, indicating a near balance between bullish and bearish forces. Momentum indicators remain low, suggesting a lack of clear trend and more event-driven volatility. Current prices are fluctuating around $70, indicating the market is awaiting new supply/demand or geopolitical signals to redefine the trading range.
Editor's Summary : The current crude oil market is rapidly shifting from a geopolitical risk-driven phase to a supply and demand fundamentals-based pricing phase. The resumption of navigation in the Strait of Hormuz and indirect communication between the US and Iran have weakened expectations of supply disruptions, allowing previously accumulated risk premiums to continue to be released. With supply returning to normal faster than expected, oil prices have entered a phase of high-level fluctuation and rebalancing. If there is substantial progress in US-Iran negotiations, oil prices may face further downward pressure; however, if the geopolitical situation deteriorates again, it could reactivate risk premiums. Overall, short-term oil prices are expected to fluctuate within a range, while the medium-term trend will still depend on the pace of supply recovery and the resilience of global demand.
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