Extended blockade risk

At Tricio we like to look at charts in order to gauge market sentiment and investor action. The last few months has seen markets twist and turn on events and rumours about the US war in Iran. At the moment it seems that the US would like an ‘off-ramp’ that gives them ‘peace with honor’ to paraphrase Nixon on Vietnam. In other words, some sort of pledge from Iran that they wouldn’t seek nuclear arms or charge a toll/control the Strait of Hormuz along with stopping their support for groups that the US (and others) label as being terrorist organisations. Iran’s demands need to be considered as well, but until some middle ground is reached it looks like the joint blockade of the Strait of Hormuz may continue, raising the spectre of the energy supply shock extending into the summer or longer.

This is shifting some market expectations. The weekly chart of ICE Brent front-month contract below (with 13 and 50-week moving averages) shows that upside risk on the break higher is still pointing to potential new all-time highs above the $150/bbl. area for $180/bbl. on simple extension measures. We don’t favour this, but recognise the risk is on the upside, unless the front-month contract can start to work below the 13-week moving average on a sustained basis (near $92/bbl. now). A turn below this should set up $80/bbl. to $78/bbl. for a test of the breakout zone.

The chart below shows the ICE Brent futures forward curve. The market has refused to price in the risk of a prolonged disruption to the energy market, hence the curve is in backwardation (prices for longer-term contracts are below near-month contract prices).

However, the Dec’2026 ICE Brent chart (weekly, below) shows that upside pressure has increased this week. Watch the $90/bbl. area as a sustained break above this will focus minds on $100/bbl. and then the $120+ per bbl. area, and higher. Use the 13-week moving average ($77/bbl. area) in this contract as support to watch ahead of the early April low near $75.88/bbl. as a potential break point. If peace breaks out and energy prices fall sharply then a drop back to $67/bbl. (50-week moving average) and the $60/bbl. support zone should follow.

Watch risk-on commodity prices, like gold and silver. The chart below is spot gold which has been under pressure even as the war in the Middle East kicked off. The slump this week is worth watching as another drop to test the 50-week moving average near $4,100/oz. could follow. A break below this level would suggest that a top is forming, very early days for this but clear risk.

Watch silver (weekly chart below) as this metal had a huge catch-up rally in 2025 and early 2026. There is a risk that the correction of the last few months turns into a bigger selloff if ‘risk off’ trading picks up again. A turn below $60/oz. and then the $57.85/oz. (50-week moving average) would shift the focus to the $50/oz. area again, then back to the $30/oz. area. If dips draw out buyers ahead of the $60/oz. zone though bulls will hold onto the hope that gains to $80/oz. for $100/$120+ per oz. may be seen again.

The last few months have been difficult as swings in some key commodity markets have been sharp. If the US settles for a blockade on the view that Iran will buckle as time drags on, this uncertainty may extend for longer than we – and the market – have been looking for. Iran outlasted Iraq for around 8 years in the 1980’s.

Gerry Celaya

Chief Strategist