Brent Oil Drops 40% From March High, Returns to Pre-Conflict Support Zone

Brent crude oil traded near $72.25 on Wednesday after shedding approximately 40% from its March peak of close to $120, fully erasing the war premium built up during the Iran-US escalation. The commodity has returned to the price levels that defined its base before the conflict began.

The sell-off was driven by a combination of stalled diplomatic talks between Iran and the United States, fading conflict risk around the Hormuz shipping lanes, and a renewed market focus on supply-demand fundamentals and the broader macroeconomic outlook. Traders rotated away from geopolitical risk pricing as the Doha negotiations remained unresolved but showed no fresh escalation.

From a technical standpoint, Brent crude had been trading inside a descending parallel channel on the weekly chart since late 2023. That channel's upper band rejected price on four separate occasions through 2024 and into early 2026, capping rallies each time. When Iran-US tensions flared, oil broke out of that structure sharply, surging into a distribution zone between $104 and $114 before peaking near $120.

The 40.02% decline from that peak has now fully unwound the breakout. Brent has dropped back into what analysts identify as an accumulation zone between approximately $60 and $72. The channel's upper band, which previously acted as resistance, now sits directly beneath the current price level and represents the first technical support bulls must defend.

On the daily chart, Brent formed a symmetrical triangle following the March top, with price coiling between lower highs and higher lows toward an apex near $108. The pattern resolved to the downside in late May, triggering a near-vertical decline as war risk around Hormuz shipping lanes diminished.

The daily Relative Strength Index has dropped below 30, registering the first oversold reading since April 2025. While deeply negative momentum is confirmed by this signal, oversold RSI levels historically precede short-term pauses or technical bounces.

Current price action is centered on the $68–$72 support zone, a band that held as a base in January and February before the conflict began. Three technical elements converge in this area: the weekly channel's upper band, the daily pre-war support base, and a rising trendline from the early-year lows. Additionally, the symmetrical triangle's measured breakdown target — calculated from its widest span of approximately $29, projected from the breakdown point near $100 — points to roughly $71, a level that has now been reached.

A sustained hold above $68 would keep the pre-war base intact and open the possibility of a recovery toward the $80 level that broke in June. A daily close back above $80 would be required to materially reduce bearish pressure.

A break below $68, however, would invalidate the support thesis. The next downside target lies near $60 at the accumulation floor, with the lower channel band sitting beneath that.

On the fundamental side, declining US crude inventories and recent supply warnings provide arguments for a price floor at current levels. Offsetting those factors, a newly issued Iranian oil license and receding war risk continue to limit the scope of any rally. The near-term direction of oil prices is likely to hinge on the next major headline from the Middle East, set against evolving supply and demand dynamics.