Oil Finds a Floor as the Ceasefire Unravels and Hormuz Stays Shut

The Bounce Off $91

WTI dumped roughly 15% overnight after Trump announced a two-week ceasefire with Iran, erasing about $22/bbl of war premium in a single session. The front-month contract hit an intraday low near $91 — its lowest level since before the Strait of Hormuz closure in late February — before buyers stepped in.

The recovery wasn't a conviction bid. It was the market correcting an overshoot. The ceasefire headline triggered a mechanical unwind of long positions built up during weeks of $110+ oil, and the move went too far too fast. Stochastic and RSI indicators both plunged into deeply oversold territory, and the 61.8% Fibonacci retracement at $97.29 started acting as a magnet. CL is now changing hands around $95.23, still down double digits on the day but well off the panic lows.

A Ceasefire That Broke in Hours

The deal was supposed to reopen Hormuz. It didn't. Only two vessels transited the strait in the hours after the ceasefire took effect — the Greek-owned bulk carrier NJ Earth at 10:44 AM CET and the Liberia-flagged Daytona Beach out of Bandar Abbas. Both were dry cargo ships. Zero oil tankers made the crossing.

Then the ceasefire started falling apart. Iranian state media reported that tanker traffic had been halted after Israeli strikes on Lebanon shook the hours-old agreement. The White House insisted there was an uptick in traffic and demanded the strait reopen "immediately, quickly and safely," but the data on the water told a different story. Roughly 800 vessels remain trapped waiting for safe passage, and traffic volume has not meaningfully changed from the handful of ships that trickled through during active hostilities.

Iran has also imposed a toll to transit the strait — $1 per barrel, payable in crypto — on a waterway that has never had a toll in modern history. That alone signals Iran views the ceasefire as leverage, not capitulation.

What the Recovery Tells You

The market sold the headline and then spent the rest of the session remembering that headlines don't move barrels. Hormuz handles roughly 20 million barrels per day under normal conditions — nearly 20% of global oil trade. Today's throughput was effectively zero oil barrels.

On the inventory side, the EIA weekly report released Wednesday added to the physical tightness case. Crude stockpiles built by about 3 million barrels, above expectations — normally bearish, but less relevant when the supply chokepoint is still closed. Distillate inventories drew down well beyond consensus, extending a trend of multiyear-low distillate stocks that has been tightening product markets since Q1.

The 4% bounce from the lows is the market pricing in a simple reality: a two-week ceasefire with no tanker movement and an active Israeli-Lebanon front is not de-escalation. Oil remains far above pre-war levels near $70, and the war premium that got sold this morning is already starting to rebuild.

Trading on Hyperliquid

Trade CL on Hyperliquid with up to 20x leverage.