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- WTI hovers around $81.50 as US-Iran peace talks stall
WTI climbs after President Trump threatened strikes on Iranian infrastructure and reinstated a blockade in the Strait of Hormuz.
Renewed Washington-Tehran tensions disrupted the energy market just as Persian Gulf producers had begun increasing oil exports.
Softer-than-expected US inflation data fueled market hopes that the Federal Reserve will adopt a less hawkish stance.
West Texas Intermediate (WTI) oil price extends its gains for the third successive day, trading around $79.20 per barrel during the Asian hours on Wednesday. Crude oil prices have climbed following threats from US President Donald Trump regarding additional military strikes on Iran. This escalation comes after the reinstatement of a US blockade against Tehran in the critical Strait of Hormuz.
Trump announced that military operations would persist, warning that the US could target Iranian bridges and power plants as early as next week if Tehran refuses to return to the negotiating table. In a slight policy shift, however, he dropped plans to impose a 20% fee on cargo transiting the Strait of Hormuz, claiming that any lost revenue would be easily offset by future investments from Gulf nations into the US.
These renewed tensions between Washington and Tehran have directly supported oil prices by heightening global supply concerns. The escalating friction adds fresh uncertainty to the energy market, especially since Persian Gulf producers had recently started increasing their exports following the signing of an interim peace agreement.
Softer-than-expected US inflation data fueled hopes that the US Federal Reserve (Fed) might adopt a less hawkish monetary stance. The US Consumer Price Index (CPI) inflation eased to 3.5% year-over-year in June, dropping from a three-year high of 4.2% in May and coming in well below the market consensus of 3.8%. On a monthly basis, headline CPI actually declined by 0.4% in June, a notable shift from the 0.5% increase recorded in May.
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