Oil Price Forecast: WTI and Brent Slide as Iran Talks Keep Hormuz Risk High
Published: June 02, 2026
Author: Muhammad Umair
Key Points
- Crude oil prices remain volatile due to mixed signals from U.S.-Iran peace talks, maintaining a war-risk premium in WTI and Brent prices.
- WTI crude oil is currently trading between $80 and $120, with a breakout necessary to confirm the next major price movement.
- Brent crude oil must stay above $90 to sustain its bullish momentum.
Market Overview
On June 2, 2026, crude oil prices experienced a decline after a brief rally. Brent oil prices fell to $97, while WTI oil dropped to $91. This downturn reflects traders' skepticism regarding the ongoing U.S.-Iran peace negotiations. Previous optimism about a potential deal in May had already influenced oil prices negatively, and the continued mixed messages from both Washington and Tehran have perpetuated uncertainty, allowing oil prices to retain their war-risk premium.
Strait of Hormuz and Supply Risks
The Strait of Hormuz remains a critical factor in oil pricing. A successful peace agreement could normalize tanker flows and reduce the supply-risk premium. Conversely, if negotiations fail or Iran restricts shipping passage through the Gulf, oil prices may remain elevated. Market participants are closely monitoring developments from both sides, particularly regarding threats to Hormuz and actual tanker movements.
Supply Data and Short-Term Outlook
Recent supply data indicates a surge in U.S. crude exports to Asia and Europe, reaching record highs in May. This increase is attributed to U.S. refiners seeking alternative supply sources amid the Middle East crisis. The expectation is that U.S. crude stocks will decline due to robust demand in the physical market, contributing to ongoing price volatility. While a peace deal could negatively impact prices, limited supply and shipping risks are likely to support WTI and Brent at higher levels.
WTI Oil Forecast
The short-term outlook for WTI crude oil shows strong consolidation within the $80 to $120 range. After a drop from the $105 resistance level, WTI found support at $87, leading to a rebound. A break above $94 could push prices toward $100, while a drop below $87 may lead to a decline toward the $80 area. The long-term outlook indicates a necessary correction from the $110 resistance level, stabilizing prices below this threshold.
Brent Oil Forecast
Brent crude oil is also consolidating between $90 and $120. Despite this, the overall outlook remains bullish, as Brent has broken out of a descending broadening wedge pattern. The $90 level has transitioned from resistance to support. However, the recent drop has raised concerns about the strength of the rebound, with the RSI indicating potential for further declines. A break above $120 is needed for upward momentum, while a fall below $90 could push prices toward the $80 region.
Conclusion
Crude oil prices are expected to remain volatile as markets await more definitive developments in U.S.-Iran peace talks. An agreement could reduce the war-risk premium and lower prices, while tight supplies and strong U.S. exports may keep prices elevated. Currently, WTI and Brent are trading within the $80s and $90s, with significant movements requiring breaks above $120 for further price increases.