West Texas Intermediate (WTI) oil prices extended their rally for a second consecutive day, trading around $95.20 per barrel during Asian hours on Tuesday, as the critical Strait of Hormuz remains largely shut, significantly tightening Middle East energy supplies [1]. The ongoing closure of the Strait, now in its ninth week, has disrupted major supply chains and pushed energy prices higher, with the International Energy Agency (IEA) warning of a potential supply shock amid slowing demand risks [1].
The market is closely watching diplomatic developments, as Iran has reportedly signaled through Pakistan that hostilities could end if the United States lifts its naval blockade, revises transit rules through Hormuz, and guarantees against future military action [1]. However, a US official stated that President Donald Trump is dissatisfied with Iran’s proposal, and Iranian sources noted that Tehran is avoiding discussion of its nuclear program until hostilities cease and Gulf shipping disputes are resolved [1]. This leaves the conflict at an impasse, with Iran restricting flows through the Strait—which handles roughly 20% of global oil and gas—and the US maintaining its blockade of Iranian ports [1].
Ship-tracking data reported by Reuters showed major disruptions, with six Iranian tankers turning back due to the US blockade [1]. Despite these disruptions, an LNG tanker operated by Abu Dhabi National Oil Company (ADNOC) managed to cross the Strait of Hormuz and is reportedly nearing India as of Monday [1].
While the ongoing conflict and supply constraints have driven oil prices higher, the prospect of a lasting ceasefire and potential reopening of the Strait could cap further gains, depending on the outcome of negotiations between Iran and the US [1].
CONCLUSION
WTI oil prices have surged amid the prolonged closure of the Strait of Hormuz, which has severely disrupted global energy supplies. The market remains volatile, with further price movements hinging on diplomatic negotiations and the potential for a ceasefire or reopening of the Strait.