WTI trades near $99.00, five-week highs amid escalating Middle East supply risks
- WTI price reached near five-week highs following Houthi strikes on Saudi oil infrastructure and Red Sea ports.
- Potential US-Israeli military action targeting Iranian energy facilities after midterms is elevating global market risk.
- Saudi Aramco reportedly ordered headquarters staff to evacuate in Dhahran amid heightening regional conflict fears.
West Texas Intermediate (WTI) oil price remains stronger for the second successive day, trading around $98.80 per barrel during Asian hours on Friday. WTI price remains near its highest level in five weeks, driven by escalating geopolitical tensions and supply risks in the Middle East.
Iran-backed Houthi militants in Yemen recently claimed responsibility for attacks on Saudi Arabia’s Red Sea port of Yanbu, as well as deadly strikes targeting an oil field and an airport in the world's largest crude oil exporter. Heightening concerns further, the US and Israeli militaries have reportedly drawn up plans for potential renewed attacks against Iran after next month’s midterm elections, with Iran’s energy infrastructure likely serving as a key target. Meanwhile, in Europe, Ukraine has intensified its attacks on Russian oil refineries amid a US-Russia agreement involving diesel supplies.
Energy market analysts emphasize that these compounding threats are fueling the recent upward price momentum. In a note cited by Reuters, energy advisory firm Ritterbusch and Associates observed that "the complex is rebounding on another strong injection of risk premium related to an additional Houthi attack on Saudi infrastructure amid talk of a combined US-Israeli strike on Iran after the midterms."
Adding to the sense of urgency on the ground, Saudi state oil company Aramco has instructed staff to evacuate its headquarters in Dhahran on the Persian Gulf, according to six sources familiar with the matter. While Aramco did not immediately respond to requests for comment, this instruction marks what would be the company's first major evacuation since the onset of the conflict with Iran.
Analysts at Deutsche Bank say they are “starting with the oil moves,” noting that “several geopolitical headlines came through overnight that led to mounting concerns about a fresh escalation in the conflict.” Against that backdrop, they highlight that Brent has rebounded to around a five‑month high near $110 per barrel, with reports of potential US and Israel strikes on Iran’s energy infrastructure and continued attacks in Saudi Arabia fuelling worries that investors may now be pricing in a prolonged period of elevated oil prices well into 2027.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
Author
Akhtar Faruqui
FXStreet
Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.
