WTI remains volatile amid persistent geopolitical risks and supply disruptions
- WTI stalls below $100 as rally pauses after sharp geopolitical-driven gains
- Oil remains volatile as markets assess US-Iran war and Hormuz disruptions
- Iranian strikes on energy infrastructures keep supply risks elevated.
West Texas Intermediate (WTI) Crude Oil trims part of earlier gains and edges lower on Tuesday as traders struggle to extend the rally at elevated levels while continuing to assess geopolitical developments surrounding the US-Iran war and ongoing supply disruptions through the Strait of Hormuz.
At the time of writing, WTI trades around $94.85, easing from the daily high of $97.63 touched during the European trading session.
The lack of upward momentum suggests that markets may have largely priced in the current situation, though uncertainty remains elevated as the conflict shows no clear signs of de-escalation. Iran continues to target key energy infrastructure across the Persian Gulf, further straining global supply and helping to limit downside in crude prices despite the latest pullback.
Shipping through the Strait of Hormuz remains a key focus of the US-Iran war, though markets are seeing some relief as limited flows continue. Several countries, including China, India, Pakistan and Türkiye, are securing or seeking passage for their vessels through talks with Iran, while European nations such as France and Italy are also in discussions.
Meanwhile, International Energy Agency (IEA) Executive Director Fatih Birol said it will take time for global energy trade to recover, adding that the agency stands ready to release additional stockpiles if needed.
Iran’s Foreign Minister Abbas Araghchi said recently that the Strait of Hormuz would be closed only to “enemies and those supporting their aggression,” according to Iran’s SNN news agency.
Separately, US President Donald Trump asked allied nations that rely on the route to help secure the Strait of Hormuz and send warships. However, several key US allies have refused to send them.
Arsenio Dominguez, Secretary-General of the International Maritime Organization (IMO), said naval escorts through the Strait of Hormuz would not “100 per cent guarantee” the safety of ships transiting the critical waterway. He added that military assistance is “not a long-term or sustainable solution,” according to the Financial Times.
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
Vishal Chaturvedi
FXStreet
I am a macro-focused research analyst with over four years of experience covering forex and commodities market. I enjoy breaking down complex economic trends and turning them into clear, actionable insights that help traders stay ahead of the curve.
