Oil bled a war premium throughout May on the assumption that the U.S.-Iran deal was a formality, and on Monday the market received a blunt reminder that no one actually signed anything. Spot West Texas Intermediate (WTI) opened near $88.00, doubling from the intraday low, and then increased during the US session, reaching a high near $93.00 before settling near $91.00. The moment Tehran reached for the one lever it had repeatedly used, the tape reassessed a conflict that was said to be effectively over. Both capitals perform in front of their home crowd, and the market still confuses these results with progress.

An agreement that Tehran has just withdrawn from

Here, skepticism towards the Iranian side is confirmed. The statement that Iran would stop exchanging messages through mediators and “completely” close the Strait of Hormuz came through the state-affiliated outlet Tasnim, citing a statement it did not attribute to any of the named officials. The stated reason was Israel’s expanded operation in Lebanon against Hezbollah, with Tehran insisting that dialogue would not resume until Israel withdraws completely and ceases attacks in Lebanon and Gaza. Strip away the frame and the content becomes familiar: it’s the same Hormuz threat that Tehran has been making since the beginning of the war, used as leverage whenever talks become uncomfortable. The waterway has been disputed and largely closed to international shipping for months, so a pledge to close it “completely” marks not so much an escalation as a louder version of the status quo. A detail worth considering is that the draft memorandum of understanding (MOU) was still awaiting signature from both Trump and newly installed Ayatollah Mojtaba Khamenei, who had not appeared in public since his nomination, and that Washington had only days earlier tightened its terms on enriched uranium and the straits. The deal was never as completed as May’s price action suggested.

Everything is fine in Washington

The American side deserves no less attention. On Friday, Trump ended the naval blockade of the strait, telling stranded ships they could start returning home, a clear de-escalation. On Monday, when Iranian state media reported that the talks had ended, the White House said it had not heard of any such matter and that negotiations were “continuing at a fast pace” and advised people to “sit back and relax” because “it always works out.” When pressed, he admitted that “it’s okay if they stop talking” and that the Iranians are “better negotiators than fighters.” This is the contradiction that the consensus continues to gloss over: one side publicly withdraws from the discussion, the other insists that nothing has changed, and the market that wants an sanguine version must reconcile two versions that cannot be true at the same time. When official communications and contractor statements differ so much, the war premium belongs back into the price, not outside of it.

The second chokepoint appeared again

Bab el-Mandeba’s angle indicates that this is a lever, not a plan. Tehran’s statement also resulted in the activation of “other fronts”, calling the Bab el-Mandeb Strait the “snake of the Red Sea”, where Iran-allied forces had previously disrupted traffic. This threat has been dusted off many times since the spring, but has not been implemented on a huge scale, and combined with Hormuz’s promise, it looks calibrated for headline rather than damage. The arithmetic is still food for thought: About a fifth of the world’s oil flows through Hormuz and much of its offshore oil flows through Bab el-Mandeb, so a credible threat to both sides creates fear in the market regardless of what happens next.

The premium bleeding hasn’t gone away

The daily chart shows why this still matters. Even after May’s slippage, WTI immediately returns to its 50-day exponential moving average (EMA) near $92.00, the reversal it lost delayed last month, and is well above the 200 EMA, near $77.50. Zoom out and the contrast becomes clearer: the blob is miles below the war high, above the $113.00 high of early March, and yet still well north of the base of around $62.00 that was in place before the conflict. The premium has fallen significantly from its highs but is nowhere close to disappearing, and Monday’s move shows how quickly the market will try to rebuild it once Tehran starts hitting the strait. The daily Stochastic Relative Strength Index (Stoch RSI) near 32 is rising from the lower half of the range, leaving room to run if headlines become more repeated.

Levels and trading

The jump that mattered occurred a few hours before the US session, when the price of WTI rose from an opening level of $88.00 to $93.00 when the Tasni news broke, and then fell to around $91.00. Brent futures, the more widely followed global benchmark, rose toward $97.00 from around $93.00 earlier on the same news. Bias is rising while talks remain frozen and the threat from Hormuz continues, but this is a headline, not a trend that can reverse as a result of a single social media post. The $92.00 to $93.00 zone, where the 50 EMA hits its highest level for the day, is a wall to break; a daily close above indicates that the market is seriously rebuilding the war premium. On the other hand, the first support is $88.00 and a break below this level means that the rebound has failed. Faint the strength towards the resistance at $92.00 to $93.00 unless there is an actual disruption because in this regime the only thing that matters is the difference between a threat and an event and so far it is still a threat.

WTI 5-minute chart