WTI rises to near $85.00 amid escalating US-Iran tensions

• WTI rises as non-existent US-Iran talks and a continuing naval blockade keep the Strait of Hormuz route highly vulnerable.

• Iranian forces intensified hostilities, marking eight regional vessel attacks this month, including ships linked to key allies.

• Industry data showed domestic crude inventories dropped by 328,000 barrels last week, supporting higher oil prices.

West Texas Intermediate (WTI) oil price extends its gains for the fourth consecutive day, trading around $84.80 per barrel during the Asian hours on Wednesday. Crude oil prices advance as ongoing geopolitical friction between the United States (US) and Iran sustained market concerns over global supply. With little indication of a potential agreement to end the conflict and fully reopen the strategic Strait of Hormuz, traders remain on high alert.

US President Donald Trump confirmed that the US naval blockade remains in effect and noted there are currently no active negotiations with Tehran. Despite official assertions that the waterway is open and mines have been cleared, shipping risks stay elevated, resulting in severely restricted transit through the region.

The situation on the water remains precarious following a recent surge in regional hostility. Iranian forces have intensified their actions over the past week, contributing to a total of eight reported attacks this month on vessels passing through Hormuz, including ships tied to Saudi Arabia and the UAE.

Adding to the supply dynamics, US industry data revealed that domestic crude inventories dropped by 328,000 barrels last week, offering a modest pullback after a massive 9.07 million-barrel surge reported the week prior.

Oil remains vulnerable as US–Iran standoff prolongs supply disruption

Strategists at BNY highlight that “shipping activity remains heavily disrupted” in and around the Strait of Hormuz, with “fresh attacks near the strait” further reinforcing market “supply concerns.” They note that President Trump has argued that “U.S. leverage over Iran remains substantial” and has claimed that “back channels are open,” although Tehran has publicly disputed this characterization. According to BNY, the “unresolved standoff keeps oil vulnerable to renewed escalation and prolonged disruption,” leaving Brent, WTI and regional benchmarks exposed to any further deterioration in the security backdrop.