West Texas Intermediate (WTI) US Oil surged 1.89% on Thursday, trading around $85.85 at the time of writing, after reaching a fresh three-week high of $87.38 earlier in the day [1]. The rally in oil prices is attributed to ongoing disruptions in global energy supplies and the absence of a diplomatic breakthrough between Washington and Tehran [1]. Concerns over the potential closure of the Strait of Hormuz and the Bab el-Mandeb Strait, which together account for approximately 27% of global energy supply, have contributed to a significant risk premium in oil prices [1].
The likelihood of a rapid normalization in supply remains low as US President Donald Trump intensifies economic pressure on Iran, warning that countries providing economic support to Tehran could face severe consequences [1]. Trump has specifically called for an end to oil smuggling, swap lines, cash transfers, and other mechanisms that could bolster the Iranian economy, further fueling fears that the Strait of Hormuz could remain closed for an extended period and keeping risks to global energy flows elevated [1].
On the diplomatic front, Qatar's Foreign Ministry spokesperson Majed Al-Ansari stated that ongoing talks between Iran and Oman regarding the management of the Strait of Hormuz could be a key step toward restarting broader diplomatic discussions between the United States and Iran [1]. However, the lack of an immediate agreement continues to support WTI prices for now [1].
From a technical perspective, WTI US Oil maintains a bullish near-term bias, trading above the 100-period simple moving average (SMA) at $83.52 and the 200-period SMA at $82.26 [1]. Immediate support is seen at $85.65 and $85.00, with deeper demand levels at $83.70, $83.52, and $82.26, while significant resistance stands at $87.38. A sustained break above this level could lead to further gains as bullish momentum extends [1].
CONCLUSION
WTI oil prices have climbed to a three-week high, driven by geopolitical tensions and supply concerns related to Iran and key global shipping routes. The market remains well-supported technically, with bullish momentum likely to persist unless diplomatic progress is achieved. Investors are closely watching developments in the region for further direction.