West Texas Intermediate (WTI), the US crude oil benchmark, climbed to approximately $86.70 during Asian trading hours on Monday, driven by renewed tensions between the United States and Iran in the Strait of Hormuz [1]. The escalation follows claims from Iran's military that the US violated a ceasefire by firing at one of Iran's commercial ships, with Iran vowing to retaliate against what it described as maritime and armed robbery by the US military [1].
Additionally, Iran denied participation in new peace talks with the US, contradicting earlier statements from US President Donald Trump regarding Iranian negotiators heading to Pakistan for a second round of talks [1]. This diplomatic standoff has heightened fears of supply disruptions in the oil market, which could further boost WTI prices in the near term [1].
Market participants are also awaiting the American Petroleum Institute (API) report, scheduled for release later on Tuesday. The report is expected to provide insights into crude oil inventory levels, with a larger-than-expected draw indicating stronger demand and potentially lifting WTI prices, while a bigger build could signal weaker demand or excess supply, weighing on prices [1].
The combination of geopolitical tensions and anticipation of inventory data has contributed to increased volatility and upward momentum in WTI prices, underscoring the sensitivity of oil markets to both supply risks and demand signals [1].
CONCLUSION
WTI prices have surged above $86.50 amid renewed US-Iran tensions in the Strait of Hormuz, raising concerns about potential supply disruptions. The market is closely watching the upcoming API inventory report for further direction. Geopolitical risks and inventory data remain key drivers for oil prices in the near term.