Gradual pullback as reserve flows increase and war timeline shortens; Phase 3→4 transition begins
Managed money long liquidation; declining volume on rallies
Mar 20-26+
Rationale
The supply shock is confirmed and ongoing (Hormuz blocked, 16+ mb/d halted), but Phase 3 supply response is underway (IEA 400M release, Saudi ramp). The double bottom pattern ($76.8 spring, $91.5 neckline broken) projects to $106. Historical analog: Russia-Ukraine 2022 saw Brent sustain above $100 for 3+ months despite SPR releases. However, the war timeline compression (2-4 more weeks) and record-scale IEA release suggest a shorter plateau than 2022. Price should reach $100-106 zone, then form a plateau before beginning normalization.
$81.00 (return to crash consolidation zone = Phase 2 not extending)
Timeline
2-4 weeks
Direction
strongly bullish
Roadmap
step
level
action
signal
est_timing
1
$100-106
Break through Phase 3 resistance; new escalation catalyst accelerates buying
Escalation headline — Saudi infrastructure attack, Hormuz mine incident, war broadens
Mar 12-17
2
$110-115
Approach blow-off zone; this time with more physical urgency (reserves depleting, no Hormuz reopening)
Tanker rates spiking again; IEA release proves inadequate; new force majeure declarations
Mar 17-22
3
$120-125
Retest/exceed Mar 9 blow-off high; demand destruction begins to bite at this level
Above $120, Asian refinery run cuts accelerate; physical market shows first signs of demand response
Mar 22-26
Rationale
If the war extends beyond 4 weeks, new supreme leader Mojtaba Khamenei takes a harder line, or conflict spreads to Saudi infrastructure, the supply shock deepens. The IEA reserve release (400M bbl over 120 days = ~3.3 mb/d) cannot close a 16 mb/d gap. At $120+ WTI, demand destruction becomes the resolution mechanism — the archetype's Phase 3 fails and Phase 2 panic buying resumes. This mirrors the 2022 scenario where Brent sustained above $100 for months.
Inventory builds resume; tanker rates normalize; managed money long liquidation accelerates; US recession fears compound the selling
Mar 19-26
4
$72-75
Bottom forms at pre-war level + 5-10% residual premium; US macro weakness prevents return to $65-67 pre-war levels
Spec longs exhausted; commercial buying at value; refinery margins attractive at lower crude
Mar 22+
Rationale
Trump's "practically nothing left" signals and shortened war timeline (2-4 weeks from 4-6 weeks) create a credible path to rapid normalization. Combined with the IEA's record 400M barrel release beginning next week, a ceasefire + Hormuz reopening would create a supply glut. The residual risk premium archetype pattern suggests WTI would not return fully to pre-war $65-67 levels — a $72-78 floor accounts for the 3-8% residual premium plus the underlying demand weakness (NFP -92K, GDP 1.4%) that limits the recovery capacity of the US economy.
Regime Result
Field
Value
Active Regime
Supply Shock Breakout
Best Path
PATH001 (Phase 3 plateau with measured recovery)
Phase
Phase 3: Supply Response — IEA 400M release announced, Saudi pre-crisis ramp; price forming plateau after $120 blow-off