10% weekly surge: WTI holds above $90.00 amid Middle East escalation

Escalating US-Iran conflicts and Red Sea attacks drive sharp fears of global oil supply disruptions.
Trump warns of massive military retaliation following Houthi strikes on Saudi oil tankers.
Global shipping reroutes, and Black Sea loading halts further choke critical crude export routes.

Akhtar Faruqui FXStreet

West Texas Intermediate (WTI) oil price halts its three-day winning streak, trading around $90.20 per barrel during the Asian hours on Friday. However, WTI crude price is on track to surge over 10% this week. The dramatic rally comes as escalating tensions in the Middle East stoke intense fears of widespread global oil supply disruptions.

Fueling the market anxiety, the United States has launched its 13th consecutive day of strikes against Iran, with both nations firmly ruling out near-term diplomatic talks. Tensions flared further after President Trump threatened "major military punishment" against Iran and Houthi forces over any subsequent strikes on Red Sea shipping, while noting that he is considering a "massive attack" on Iran itself.

These severe warnings follow recent strikes by Iran-backed Houthi militants against two Saudi oil tankers in the Red Sea. The targeted waterway serves as a vital alternative export corridor for Saudi Arabia, particularly as ongoing combat continues to snarl vessel movement through the critical Strait of Hormuz.

In response to the growing peril, Asian importers have already begun discussions to reroute Saudi crude shipments through the Suez Canal and around Africa. Compounding the regional supply squeeze, the Caspian Pipeline Consortium suspended crude loadings at its Black Sea terminal following tanker attacks, effectively choking off approximately 80% of Kazakhstan’s oil exports.

WTI Oil FAQs

What is WTI Oil?

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.

What factors drive the price of WTI Oil?

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.

How does inventory data impact the price of WTI Oil

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.

How does OPEC influence the price of WTI Oil?

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.

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