WTI trades near $104.00 after 10% surge on Trump's Iran threats
- WTI rises over 10% amid rising supply risks following recent Trump threats on Iran.
- Trump highlighted a Tehran bridge strike, warning of further action and urging Iran to “make a deal.”
- Reports suggest that Iran and Oman were drafting a protocol to monitor the Strait of Hormuz transit.
West Texas Intermediate (WTI) oil price rises over 10% after two days of losses, trading around $103.80 per barrel during the Asian hours on Friday. Crude oil prices surged as markets reassessed the scale of supply risks stemming from the ongoing conflict in the Persian Gulf.
US President Donald Trump offered no clarity on steps toward reopening the Strait of Hormuz, warning of intensified military action over the next two to three weeks and issuing strong threats against Iran. Trump also pointed to the destruction of a bridge in Tehran, signaling further escalation while urging Iran to reach a deal before it is too late.
In response, Iran’s Foreign Minister Abbas Araghchi said recent US strikes on civilian infrastructure would not force a retreat, describing them instead as evidence of an opponent in disarray and moral decline.
However, oil prices briefly eased following reports that Iran and Oman are working on a protocol to monitor transit through the Strait of Hormuz, but optimism faded quickly. Iranian official Kazem Gharibabadi stated that tanker movements through the vital route should be supervised and coordinated by both countries, according to IRNA.
Meanwhile, the United Kingdom (UK) is hosting discussions with multiple countries to secure the passage, while OPEC+ is weighing a potential output increase, though any additional supply is unlikely to affect markets in the near term.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
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