Traffic through the Strait of Hormuz surged nearly 400% in two weeks, with nearly 200 vessels recorded last week compared with just 40 two weeks prior, according to shipping data.
Despite the increase in maritime movement, Iran’s oil exports have effectively ground to a halt. Iranian central bank officials stated last week that crude shipments have "virtually stopped," as loaded tankers remain trapped inside the Gulf and empty vessels struggle to enter. The cost of Iranian crude cargoes has climbed to multi-year highs, reflecting the tightening supply conditions.
The divergence between rising transit volumes and collapsing Iranian exports underscores the complexity of the current oil market dynamics. While more ships pass through the strait, the absence of Iranian crude from Asian markets suggests supply disruptions persist.
Technical analysis of West Texas Intermediate crude points to a local uptrend, with WTI breaking above a descending trendline and retesting the 4-hour 50-exponential moving average band after the Stochastic RSI exited oversold territory. An inverse head-and-shoulders pattern is forming, with a neckline between $85.95 and $87.84.
The analysis suggests that if the 50-EMA continues to provide support and WTI breaks through the neckline, the measured move targets roughly $100 per barrel. The next few sessions will be critical in determining whether the uptrend holds or reverses.
Equity markets have exhibited unusually low volatility, with the S&P 500 remaining in extreme low-volatility territory for 17 consecutive days. Historically, such extended calm periods have preceded pullbacks, though not universally. The index has approached the upper bounds of a long-term logarithmic channel, with the VIX holding below 17 for four weeks.
Historical precedents show that prior touches of this channel’s upper boundary in 2024 and 2025 were followed by notable declines, though timing and magnitude vary. The analysis flags caution for overnight long positions, as the S&P could still advance toward the 7,816–8,000 zone before encountering stronger resistance.
Nvidia’s upcoming earnings report after the closing bell on Wednesday may influence broader market direction, with traders likely to remain on the sidelines ahead of the release.
For oil, the key questions are whether the 4-hour 50-EMA band will hold as support and whether WTI can decisively break above the $85.95–$87.84 neckline to trigger further upside. For equities, the focus is on whether the S&P can sustain its climb toward the channel’s upper range or if volatility begins to rise.
The analysis does not signal an immediate reversal but warns that both markets are approaching levels where the next directional move could be decisive.
