WTI rises to near $95.50 as Strait of Hormuz remains shut
- WTI rises as the Strait of Hormuz remains largely shut, tightening Middle East supplies.
- Oil gains may be capped as markets assess ceasefire prospects and potential reopening after Iran’s latest US proposal.
- Six Iranian tankers turned back amid US blockade; ADNOC LNG tanker crossed Hormuz, nearing India.
West Texas Intermediate (WTI) oil price extends its gains for the second successive day, trading around $95.20 per barrel during the Asian hours on Tuesday. Crude oil prices rise as the critical Strait of Hormuz remains largely shut, tightening Middle East energy supplies.
However, Oil gains may be capped as markets weigh prospects of a lasting ceasefire and a potential reopening after Iran’s fresh proposal to the United States (US). Tehran reportedly signaled via Pakistan that hostilities could end if Washington lifts its naval blockade, revises transit rules through Hormuz, and guarantees against future military action.
A US official said on Monday that President Donald Trump is dissatisfied with Iran’s proposal. Iranian sources added that Tehran avoided addressing its nuclear program until hostilities cease and Gulf shipping disputes are resolved.
Now in its ninth month, the conflict has pushed energy prices higher and disrupted major supply chains, while the International Energy Agency (IEA) warns of a potential supply shock alongside slowing demand risks.
Trump’s stance leaves the conflict at an impasse, with Iran restricting flows through the Strait, handling roughly 20% of global oil and gas, and the US maintaining its blockade of Iranian ports.
Reuters reported ship-tracking data showing major disruptions, with six Iranian tankers turning back due to the US blockade. However, an LNG tanker operated by Abu Dhabi National Oil Company (ADNOC) crossed the Strait of Hormuz and is reportedly nearing India, data showed Monday.
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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