WTI extends gains to near $64.00 on Iran sanctions, falling US inventories

WTI price edged higher, supported by new US sanctions on Iran and growing signs of tightening supply.
The American Petroleum Institute (API) reported a draw of 4.6 million barrels in US crude inventories last week.
President Trump expressed optimism over ongoing US-China trade negotiations, highlighting encouraging progress in discussions.

Akhtar Faruqui FXStreet

West Texas Intermediate (WTI) Oil price extends its rally for a second straight session, trading around $63.90 per barrel during Asian hours on Wednesday. The continued rise in Oil prices comes amid fresh United States (US) sanctions on Iran and signs of tightening supply.

On Tuesday, the US imposed new sanctions targeting Seyed Asadoollah Emamjomeh, a major player in Iranian liquefied petroleum gas (LPG) and crude Oil shipping, along with his corporate network. According to the US Treasury, Emamjomeh’s group has facilitated the export of hundreds of millions of dollars worth of Iranian Oil products to international markets, per Reuters.

Adding to the bullish momentum, US crude stockpiles showed a sharp decline. The American Petroleum Institute (API) reported a drawdown of approximately 4.6 million barrels last week, according to market sources. Official data from the Energy Information Administration (EIA) is due Wednesday, with Reuters' analysts forecasting an average decline of 800,000 barrels.

Crude Oil prices were also supported by a more upbeat market mood. On Tuesday, Treasury Secretary Scott Bessent called the current tariff standoff “unsustainable,” hinting at potential easing of trade tensions. Meanwhile, US President Donald Trump reassured markets that he has no plans to dismiss Federal Reserve Chair Jerome Powell, helping alleviate concerns about central bank independence.

President Trump also struck an optimistic tone on US-China trade talks, noting progress in negotiations. While he ruled out extreme tariff hikes—stating they wouldn’t reach 145%—he confirmed that tariffs would not be fully lifted either. The White House indicated that efforts are underway to negotiate trade deals aimed at reducing the broad tariffs introduced earlier this month.

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.

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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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