WTI rises above $99.00 as Iran warns of wider blockade
- WTI price drifts higher to near $99.15 in Tuesday’s early European session.
- Iranian military warns blockade could extend to the Bab al-Mandeb Strait and the Suez Canal.
- Gulf oil flows rise to around 80% of the pre-war rate in September.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $99.15 during the early European trading hours on Tuesday. WTI edges higher to over one-month high as traders weigh the risk of further Iranian attacks in the Strait of Hormuz against robust crude flows from the Persian Gulf.
Iran’s Islamic Revolutionary Guard Corps (IRGC) said on Monday that Tehran has not yet completely closed the Strait of Hormuz and can expand the scope of the blockade to the Bab al-Mandeb Strait and the Suez Canal. Iranian Foreign Minister Abbas Araghchi warned the US and Israel against renewing attacks on Tehran, saying they have "unfinished jobs" as well.
Furthermore, the Houthis claimed Monday to have attacked King Khalid International Airport in Riyadh, Saudi Aramco facilities in Yanbu on the Red Sea Coast, the Shaybah oilfield, and Saudi naval forces.
“The risks to oil prices clearly lie to the upside,” said Hamad Hussain, a commodities economist at Capital Economics Ltd. The escalation in attacks on ships raises the possibility of a “renewed fall in oil supply and a continued rise in prices,” Hamad added.
Meanwhile, crude exports from the Gulf have continued at an accelerated pace. US Energy Secretary Chris Wright stated flows had recovered to about 80% of their pre-war level, although refined-product shipments remained constrained.
Traders await the release of the American Petroleum Institute (API) crude oil stockpiles report later on Tuesday. A larger-than-expected crude oil inventory draw indicates stronger demand and could lift the WTI price, while a bigger build than estimated signals weaker demand or excess supply, which might undermine the WTI price.
Oil swings as Strait of Hormuz tensions collide with US Graham Act waiver
Analysts at Rabobank report that “oil prices surged following further reports of attacks on shipping in the Strait of Hormuz, with Iran claiming that two tankers carrying up to 4 million barrels of crude were struck by marine mines.” However, they note that sentiment shifted “following market close on Friday” as news emerged that “President Trump is enacting a waiver of steep Graham Act sanctions and tariffs that were due to come into effect,” a move which Rabobank argues “would also directly contradict recent efforts of the administration to reduce fuel prices ahead of the midterm elections.” In the wake of these developments, Rabobank highlights that “active Brent crude futures are down by $1.80/bbl at time of writing,” while cautioning that, “depending on how the calculation is performed, the top five buyers of Russian energy products are likely to include China, India, Turkey and the European Union,” underscoring the potential for future sanctions to significantly disrupt global energy trade.
Technical Analysis: WTI remains bullish in the near term
In the daily chart, WTI US Oil trades at $99.13, extending its recovery above both the 100-day simple moving average (SMA) at $84.57 and the Bollinger Bands’ middle line near $92.47, which now underpin a bullish near-term bias. Price is pressing against the Bollinger upper band at about $99.13, while the 14-day Relative Strength Index at 64.43 sits in positive territory but shy of overbought, suggesting strong yet not extreme upside momentum.
On the topside, immediate resistance is located at the Bollinger Bands’ upper band around $99.13, where further gains could slow or trigger consolidation. On the downside, initial support is seen at the prior session’s opening pivot near $99.13, followed by the Bollinger middle band around $92.47; a deeper pullback would expose the lower band at $85.82 and the 100-day SMA at $84.57 as a broader bullish structural floor.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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
Lallalit Srijandorn
FXStreet
Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.
