WTI Oil reverses course as Iran, Oman move closer on Hormuz talks

WTI US Oil falls 1.28% on Tuesday after reversing earlier gains.
Qatar says talks between Iran and Oman have reached an advanced stage.
Iran’s demands for compensation and sanctions relief maintain uncertainty.

Ghiles Guezout FXStreet

West Texas Intermediate (WTI) US Oil retreats on Tuesday, trading around $80.40 at the time of writing, down 1.28% on the day. The US benchmark gives back its previous gains after Qatar reported progress in negotiations between Iran and Oman regarding the Strait of Hormuz.

Qatar’s Foreign Ministry said on Tuesday that talks between Oman and Iran have reached an advanced stage. Ministry spokesperson Majed al-Ansari described the negotiations as being at a “critical juncture” and stressed that Doha supports efforts aimed at easing tensions in the region.

Qatar also said it has received positive feedback from both Iran and Oman and supports any agreement capable of guaranteeing the security of the Strait of Hormuz and freedom of navigation. These comments strengthen hopes for a resumption of maritime traffic and reduce some of the geopolitical risk premium embedded in Oil prices.

WTI had previously strengthened amid persistent uncertainty surrounding a potential reopening of the Strait of Hormuz, a strategic passage through which nearly one-fifth of global energy supply flows.

United States (US) President Donald Trump had added to this uncertainty on Monday by saying that Washington would also demand reparations related to the war, as Tehran seeks compensation before maritime traffic can normalize. Iran has notably cited compensation for war damage, the unfreezing of its assets, the removal of the US naval blockade on its ports and the lifting of sanctions among the conditions required for reopening the Strait.

Investors therefore remain attentive to details of the framework proposed by Iran and Oman for managing traffic around the Strait of Hormuz. Although Qatar’s latest comments point to diplomatic progress, the absence of a final agreement and Tehran’s significant demands keep alive the risk of renewed escalation that could trigger further volatility in the Oil market.

Diplomatic uncertainty remains elevated also after Iran reportedly ruled out direct negotiations with Donald Trump for the remainder of his term. According to Iranian media and comments from Majid Shakeri, an adviser to Iranian Parliament Speaker Mohammad Bagher Ghalibaf, Tehran intends to wait until Trump leaves office on January 20, 2029, before resuming talks with Washington. “Trump will not reach an agreement with us. We will accompany him until his term ends,” Shakeri said.

WTI US Oil technical analysis

In the one-hour chart, WTI US Oil trades at $80.72, retaining a constructive short-term tone as it holds above both the 100-period simple moving average (SMA) at $77.27 and the 200-period SMA at $78.83. The recent pullback from overbought territory is reflected in the Relative Strength Index (RSI) easing to 47.8, hinting at waning upside momentum, yet the price action remains supported by these underlying trend averages.

On the downside, initial support is seen at the psychological $80.00 level, followed by the 200-period SMA near $78.83 and the 100-period SMA around $77.27. On the topside, a break above the recent highs would expose resistance at $83.57, ahead of a more significant barrier at $84.50.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Author

Ghiles Guezout

FXStreet

Ghiles Guezout is a Market Analyst with a strong background in stock market investments, trading, and cryptocurrencies. He combines fundamental and technical analysis skills to identify market opportunities.

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