WTI climbs back closer to $72.00 as closure of Strait of Hormuz fuels supply concerns

• WTI attracts some dip-buyers during the Asian session and remains close to a multi-month peak.

• The closure of the Strait of Hormuz raises concerns about supply disruption and acts as a tailwind.

• The OPEC+ decision to raise output and a broadly firmer USD might cap gains for the commodity.

West Texas Intermediate (WTI) US Crude Oil prices reverse a modest Asian session dip to the $70.00 neighborhood and climbs to the $71.70-$71.75 region in the last hour. The commodity remains well within striking distance of its highest level since June 2025, touched on Monday, and might continue to draw support from a dramatic escalation of tensions in the Middle East.

The US and Israel launched a coordinated military strike on Iran on Saturday, killing Supreme Leader Ayatollah Ali Khamenei. In response, Iran launched a barrage of missiles that struck US bases and heavily populated civilian areas in US-allied countries across the Middle East. Adding to this, US President Donald Trump said more strikes would continue for as long as necessary, underscoring the risk of a prolonged war in the key oil-producing region.

Furthermore, Iran's Islamic Revolutionary Guards Corps (IRGC) announced the stoppage of shipments through the Strait of Hormuz. The critical maritime chokepoint is an important shipping channel for more than 20% of global oil, and the closure fuels concerns about some supply disruptions. This continues to act as a tailwind for Crude Oil prices. However, the OPEC+ decision to increase output by 206,000 barrels caps gains for the commodity.

Meanwhile, the global flight to safety, along with reduced bets for more aggressive policy easing by the US Federal Reserve (Fed), assists the safe-haven US Dollar (USD) to preserve the previous day's strong gains to the highest level since January 20. This turns out to be another factor acting as a headwind for the USD-denominated commodities, including Crude Oil prices, which is holding back bulls from positioning for any further appreciation.