West Texas Intermediate (WTI) futures on NYMEX traded over 1% higher, surpassing $96.00 during the European trading session on Tuesday, as oil prices continued to demonstrate strength in the context of an ongoing global energy crisis caused by the extended closure of the Strait of Hormuz. The Strait, a critical passage for nearly 20% of the world's energy supply, remains closed, fueling uncertainty and upward pressure on oil prices [1].
The closure has been exacerbated by stalled peace talks between the United States and Iran. The United States has shown little interest in resuming negotiations, stating that Iran's proposal 'is not good enough,' while Iran has demanded the lifting of the US blockade on Iranian ships as a precondition for further discussions regarding Tehran’s nuclear ambitions [1].
Market experts have warned that oil prices could rise further if the Strait of Hormuz remains closed. Citibank, under a bull-case scenario where oil flows through the strait are disrupted through the end of June, projects Brent prices could spike to $150 a barrel. As of the latest update, Brent Crude Oil was trading 1.1% higher near $103 [1].
Investors are also awaiting monetary policy announcements from major central banks, including the Federal Reserve, European Central Bank, and Bank of England, to gauge the potential impact on global oil demand. Technical analysis indicates that WTI remains in a constructive near-term trend, trading above its 20-day exponential moving average (EMA) at approximately $92.12, with initial resistance at $100.37 and immediate support at $92.12. The Relative Strength Index (14) in the mid-50s suggests mild bullish momentum with room for further gains as long as support levels hold [1].
CONCLUSION
The prolonged closure of the Strait of Hormuz and ongoing geopolitical tensions have driven WTI oil prices above $96, with analysts warning of further upside if disruptions persist. Market sentiment remains bullish, supported by technical indicators and the potential for Brent to reach $150 under extended supply constraints. Investors are closely monitoring central bank decisions for additional cues on oil demand.