West Texas Intermediate (WTI) oil prices climbed to around $97.50 on Wednesday, marking a 2.37% increase for the day, as persistent geopolitical risks continue to drive energy markets [1]. The escalation of tensions in the Middle East, including recent US military strikes near the Strait of Hormuz and Israeli attacks on senior Iranian officials, has heightened fears of major disruptions to global oil flows [1]. Iran has reportedly targeted oil and gas infrastructure in the United Arab Emirates (UAE) and Iraq, directly impacting upstream production facilities and further escalating the situation [1].
Qatar has issued warnings about risks to global energy security following strikes on Iran’s South Pars Gas field, underscoring the critical importance of such infrastructure for market stability [1]. Despite these risks, some developments have helped to cap further gains in oil prices. Iraq has reached an agreement to resume oil exports through Turkey’s Ceyhan port, which bypasses some of the risks associated with the Strait of Hormuz [1]. Additionally, Iran has allowed safe passage for certain vessels based on their affiliations, temporarily reducing concerns over maritime supply disruptions [1].
Deutsche Bank analysts note that Brent Crude remains above $100, with daily volatility narrowing, suggesting that markets are beginning to price in alternative supply routes. The Iraq-Turkey deal has contributed to a degree of market calm, even as geopolitical risks remain elevated [1]. On the fundamental side, US inventory data is weighing on sentiment. The American Petroleum Institute (API) reported a 6.6 million-barrel increase in crude stocks, contrary to expectations of a draw, while the Energy Information Administration (EIA) confirmed a similar trend with inventories rising by 6.16 million barrels, marking the fourth consecutive weekly build [1].
The United States is stepping up efforts to secure key shipping routes and seeking to reopen the Strait of Hormuz, although allies have so far declined to participate. The US administration has also issued a temporary waiver of the Jones Act to facilitate the transport of energy products and help contain rising prices [1]. Overall, the oil market remains caught between bullish geopolitical risks and short-term signs of oversupply, keeping WTI on an upward but volatile trajectory [1].
CONCLUSION
WTI oil prices are being pushed higher by ongoing geopolitical tensions in the Middle East, despite some easing of supply concerns due to the Iraq-Turkey export deal and temporary maritime arrangements. However, rising US crude inventories and efforts to stabilize shipping routes are tempering further gains. The market remains volatile, with elevated risks and mixed signals from supply and demand factors.