New Delhi, July 27 -- Oil went on one of its tears again as U.S.-Iran tensions ratcheted higher this week. Yet despite the scary headlines, crude could soon be heading lower.

The Iran war conflict has flared up again, disrupting the flow of goods through the critical Strait of Hormuz-and sending oil prices higher. The price of Brent crude traded around $101 per barrel on Friday, and was up about 42% from its multi-month low of $71 hit in early July, before ending the day at $96.78.

But the market has seen this movie before, and the recent rally seems to have hit its limit. That isn't just because the war's spillover effect on oil production could subside-the Federal Reserve and China could contribute to some downside, too.

While the re...