Key Moments
- WTI trades near $93.65 in Asian hours on Monday as restricted transit through the Strait of Hormuz supports prices.
- Iran has reportedly put forward a new proposal on reopening the Strait via Pakistani mediators, but U.S. interest remains unclear.
- Market participants are awaiting Tuesday’s API inventory data for further direction on demand and supply conditions.
WTI Supported by Geopolitical Tensions in Hormuz
West Texas Intermediate (WTI), the U.S. crude oil benchmark, is quoted around $93.65 during Asian trading on Monday, with prices edging higher as shipping through the Strait of Hormuz remains heavily constrained and peace efforts between the United States and Iran have stalled.
The ongoing limitations on transit through this critical chokepoint, combined with a lack of progress in negotiations, are heightening concerns about potential supply disruptions and are providing upward momentum to WTI prices.
Iranian Proposal Adds Uncertainty to Negotiation Outlook
Iran has reportedly presented the United States with a fresh proposal aimed at reopening the Strait of Hormuz and resolving the conflict. The initiative calls for extending the ceasefire to give both sides a pathway toward a permanent end to the war. According to the report, Pakistani intermediaries delivered the proposal to the White House, although it remains unclear whether Washington is prepared to engage with the plan.
The lack of clarity around the U.S. response and the broader uncertainty over the future of the Strait are feeding fears of a potential supply shock, which in turn is lending support to WTI prices.
On Sunday, U.S. President Trump instructed Jared Kushner and Steve Witkoff to cancel a planned visit to Pakistan, which has been mediating the talks, stating that Iran “offered a lot, but not enough.” Iranian President Masoud Pezeshkian countered that his country would not participate in “imposed negotiations under threats or blockade.”
Market Focus Turns to API Inventory Data
Traders are now looking ahead to the American Petroleum Institute (API) weekly report, scheduled for release later on Tuesday. A crude oil inventory draw that exceeds expectations would typically signal stronger demand and could provide additional support for WTI. Conversely, a larger-than-forecast build would suggest softer demand or oversupply, potentially weighing on prices.
| Event | Potential Market Interpretation | Possible Impact on WTI Price |
|---|---|---|
| API crude inventory draw larger than expected | Indicates stronger demand | Could lift WTI |
| API crude inventory build larger than expected | Signals weaker demand or excess supply | Might pressure WTI |
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