WTI rebounds toward $98.50 as traders weigh escalating conflicts
- WTI oil bounced back as geopolitical conflicts in the Middle East and Eastern Europe raised supply risks.
- Persian Gulf tanker flows temporarily dropped to 8.5M bpd following repeated maritime attacks on commercial vessels.
- US efforts to authorize sanctioned tankers and waive Russian sanctions are helping restore global oil flows.
West Texas Intermediate (WTI) oil price gains ground after registering modest loses in previous day, trading around $98.40 per barrel during Asian hours on Tuesday. Crude oil prices pares recent losses as market traders weigh escalating geopolitical conflicts in the Middle East and Eastern Europe against signs of robust energy flows from the Persian Gulf.
In the Middle East, Iran has continued to assert control over the Strait of Hormuz, with maritime authorities reporting multiple attacks on commercial ships. Tensions further escalated as Saudi Arabia and Iran-backed Houthi militants in Yemen traded strikes, while Russia and Ukraine simultaneously resumed targeted attacks on energy infrastructure.
These growing threats to commercial shipping led to a sharp, temporary disruption in regional trade. According to analytics firm Kpler, crude flows through the Middle East fell to a seven-day average of about 8.5 million barrels per day last week, down from more than 20 million barrels per day the previous week, amid at least 10 confirmed incidents involving commercial vessels.
Despite these disruptions, supply channels are beginning to stabilize. US Energy Secretary Chris Wright reported that Persian Gulf oil shipments have recovered to roughly 80% of pre-war levels, though refined-product deliveries remain limited. To maintain global energy supplies, the Trump administration is authorizing the sale of sanctioned oil tankers to allow legal crude transport, targeting a global "dark fleet" estimated at around 1,600 vessels.
Additionally, President Trump’s waiver of Russian sanctions has eased energy supply concerns for India, a major importer of Russian oil. This move is expected to bolster broader diplomatic ties and improve the prospects of New Delhi and Washington reaching a trade agreement.
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.
