Hormuz Traffic Surge Masks Ongoing Oil Export Issues

Traffic through the Strait of Hormuz has surged nearly 400% in two weeks, but this uptick may not be indicative of a return to normal for Iran's oil exports. The country's own shipments to Asia have almost dried up, with loaded Iranian vessels getting trapped inside the Gulf and empty tankers struggling to get in.

The cost of these cargoes has jumped to its highest level in years, according to recent data. Meanwhile, the US is poised to announce new sanctions against Tehran.

Despite this, WTI oil prices have broken through a descending trendline and are retesting their 4H 50-EMA band after moving back into oversold territory. A possible inverse head-and-shoulders formation has also emerged, with the neckline around $85.95-$87.84.

WTI is expected to break through this neckline area and trigger a technical move higher, potentially reaching the $100 area. However, the market remains cautious, with equities experiencing remarkably low volatility for 17 days straight.