WTI rises above $65.50 as supply fears grow on US-Iran tensions

• WTI rises as supply concerns intensify amid escalating US-Iran tensions and increased military activity in the key Oil region.

• A US strike could disrupt Strait of Hormuz shipments, a route carrying 20% of global Oil.

• US refiners Phillips 66 and Citgo Petroleum seek direct heavy crude purchases from Venezuela’s state Oil firm PDVSA.

West Texas Intermediate (WTI) Oil price gains ground and is trading around $65.70 per barrel during the European hours on Thursday. WTI price continues to gain ground after registering 4.9% gains in the previous session as supply concerns intensified amid escalating tensions between the United States (US) and Iran, with both sides increasing military activity in the key Oil-producing region.

Any US strike could evolve into a prolonged campaign, with Israel advocating regime change in the Islamic Republic. Analysts at ANZ noted that any conflict could disrupt shipments through the Strait of Hormuz, a vital route accounting for about 20% of global Oil consumption.

US-Iran negotiations remain unresolved, with Tehran claiming a “general agreement” on the framework of a potential nuclear deal with US officials. On the other side, US Vice President JD Vance said Iran failed to meet US red lines, while President Donald Trump reiterated that military action remains an option.

According to Reuters, Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, said tensions between Washington and Tehran remain elevated, though markets largely view a full-scale conflict as unlikely, prompting a cautious stance. Kikukawa added that Trump is unlikely to favor a sharp spike in crude prices and that any military action would probably be limited to short-term airstrikes.

US refiners Phillips 66 and Citgo Petroleum are reportedly seeking to purchase heavy crude directly from Venezuela’s state Oil firm PDVSA starting in April, bypassing trading houses and US major Chevron to improve margins.

Meanwhile, India’s state-run Bharat Petroleum Corporation Limited made its first-ever purchase of Venezuelan crude, while HPCL Mittal Energy Limited bought cargoes from the South American producer for the first time in two years, sources told Reuters.