Oil is slightly retreating after yesterday's 4.2% surge—the largest increase in about a month. Brent is trading around $94 per barrel, while WTI is near $91 per barrel. Yesterday's jump was triggered by the news that Tehran is suspending negotiations with Washington in protest against Israeli attacks in Lebanon. Trump then stated that the negotiations are proceeding "at a rapid pace"—and oil partially retraced its gains. This is a classic cycle that the market has been observing for several weeks.

The main new element is the threat of an expanded blockade. The Iranian agency "Tasnim" reported that Tehran and its regional allies have put on the agenda the issue of completely closing not only the Strait of Hormuz but also the Bab-el-Mandeb Strait at the southern end of the Red Sea—a key alternative for exporting oil bypassing the Persian Gulf. If this happens, the global oil market will find itself in a fundamentally different situation: two of the three largest transit hubs for exporting energy resources from the Middle East will be simultaneously blocked. The third remains the pipeline through Saudi Arabia, but its capacity is insufficient to offset losses of this magnitude.

The Lebanese track is turning into an independent hotspot of tension. Trump and Netanyahu presented fundamentally different versions of a phone conversation regarding military actions in Lebanon, while the Lebanese side insists on extending the ceasefire with Hezbollah to the entire territory of the country. Iran, in turn, demands that the Lebanese issue be included in the overall settlement framework—and this disagreement is what blocks progress on the Hormuz track. Further negotiations related to Lebanon are scheduled for Tuesday and Wednesday.

Trump provided the most specific timeline for negotiations to date: in an interview with ABC News, he stated that a memorandum of understanding with Iran regarding the Strait of Hormuz could be concluded within the next week. He immediately added that several points still need to be "agreed upon." He has yet to sign the agreement for a 60-day ceasefire. Visible commercial shipping through the strait remains severely limited—tracking system data does not confirm Iranian claims of normal traffic.

The situation in the oil market remains extremely unstable. As long as the strait is closed, negotiations continue with conflicting signals, and the threat from Bab-el-Mandeb looms, the market cannot establish a consistent position in either direction. Volatility is the only constant in this story.

Regarding the current technical picture for oil, buyers need to reclaim the nearest resistance at $92.50. This will allow targeting $100.40, above which it will be quite challenging to break through. The furthest goal will be around $106.80. In case of a decline, bears will try to take control at $86.50. If they succeed, breaking this range will deliver a serious blow to the bulls' positions, driving oil down to a low of $81.40, with the prospect of dropping to $74.85.