Key Moments
- WTI trades around $89.60 in Asian hours after rebounding from prior-session losses amid renewed Middle East tensions.
- The US conducts strikes on Iranian targets near the Strait of Hormuz following a base attack and mine-laying attempts, while Iran claims regional missile retaliation.
- The US Treasury reports 17 million barrels of crude transiting the Strait of Hormuz on Monday, indicating continued flows despite rising conflict.
WTI Holds Above $89.50 as Investors React to Hormuz Escalation
West Texas Intermediate (WTI) crude oil extends its recovery after falling in the previous session, trading near $89.60 during Asian hours on Thursday. The latest advance comes as market participants weigh escalating hostilities in the Middle East against ongoing efforts to keep the Strait of Hormuz open to crude shipments.
According to the article, President Donald Trump characterized the most recent US strikes on Iran as limited in duration, while emphasizing that Washington remains ready to conduct additional operations. He also reiterated his assertion that the US maintains control over the Strait of Hormuz.
US Strikes and Iranian Response Raise Regional Risk
US President Donald Trump announced new military strikes targeting Iranian positions around the Strait of Hormuz. These actions were presented as a response to Tehran’s reported attempts to lay mines in the key shipping lane and to an earlier attack on a US military installation.
Trump also cautioned that Washington would be prepared to launch a much broader military campaign if Iran decided to escalate further. In turn, Iran claimed that it had already attacked US bases across the wider region and had fired missiles toward Jordan.
Economic Pressure and Shipping Flows Through Hormuz
US Treasury Secretary Scott Bessent described Iran’s economic situation as having entered an “acceleration phase” of bankruptcy. Despite the heightening conflict, he highlighted that 17 million barrels of crude oil moved through the Strait of Hormuz on Monday, which he framed as evidence that Tehran does not control the critical maritime chokepoint.
| Key Indicator | Detail |
|---|---|
| WTI price level | Around $89.60 during Asian hours on Thursday |
| Crude flows through Hormuz | 17 million barrels on Monday |
| Conflict drivers | US strikes on Iranian targets, Iranian claims of missile attacks on US regional bases and Jordan |
BNY: Tanker Strikes Mark a Policy Shift in the Strait of Hormuz
Strategists at BNY underscored that the latest US military action in the Strait of Hormuz represents a significant departure from prior practice. They stressed that “the move marks the first time that the U.S. has hit Iranian tankers in retaliation for attacks on ships in the Strait of Hormuz, rather than for violating the naval blockade.”
According to the strategists, this shift is a key factor behind the recent increase in the geopolitical risk premium embedded in benchmark crude oil prices.
WTI Oil: Key Characteristics and Market Role
WTI Oil is a grade of crude traded on international markets. The acronym WTI refers to West Texas Intermediate, one of three primary benchmarks alongside Brent and Dubai Crude. It is classified as “light” due to its relatively low gravity and “sweet” because of its low sulfur content, attributes that make it a higher-quality crude and easier to refine.
Produced in the United States, WTI is distributed through the Cushing hub, known as “The Pipeline Crossroads of the World.” It serves as a reference grade for the broader oil market, and its price is widely quoted across financial media.
Primary Drivers of WTI Price Action
The price of WTI Oil is shaped primarily by supply and demand. Strong global growth can bolster demand and support higher prices, while weaker growth can weigh on consumption and prices. Political instability, military conflicts, and sanctions can disrupt supply and influence market behavior.
Decisions by the Organization of the Petroleum Exporting Countries (OPEC), a group of major oil-producing states, are another important driver as changes in production quotas can tighten or loosen supply. Since crude is predominantly priced in US Dollars, moves in the Dollar also matter: a weaker US Dollar can make oil relatively cheaper for holders of other currencies, while a stronger Dollar can have the opposite effect.
Impact of Inventory Data on WTI
Weekly crude oil inventory reports from the American Petroleum Institute (API) and the Energy Information Agency (EIA) are closely followed by oil traders. Inventory changes offer a snapshot of shifting supply-demand dynamics. A decline in stored volumes can suggest stronger demand and may support higher prices, whereas rising inventories can imply oversupply and pressure prices lower.
The API typically publishes its weekly data on Tuesday, followed by the EIA on Wednesday. The two sets of numbers usually align closely, with outcomes falling within 1% of each other 75% of the time. As a government body, the EIA is generally viewed as the more reliable source.
OPEC and Its Influence on WTI
OPEC is composed of 12 oil-producing countries that set output targets for member states during twice-yearly meetings. These decisions often ripple through WTI pricing. Lowering production quotas can tighten global crude supply and lend support to prices, whereas raising output can ease supply constraints and weigh on prices.
OPEC+ refers to a broader alliance that includes ten additional non-OPEC producers, with Russia identified as the most notable among them.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
