West Texas Intermediate (WTI) crude oil prices eased to $94.45 on Friday, retreating from a recent high of $97.00 reached on Thursday, but remained close to two-week highs and were on track for a nearly 7% weekly gain [1]. The recent rally in crude prices was driven by escalating tensions in the Middle East, particularly concerns over the ongoing war and the potential closure of the Strait of Hormuz, a critical chokepoint for global oil shipments [1].
Investor optimism for a swift peace deal between the US and Iran diminished as both countries increased their threats following the extension of the ceasefire. Tensions were further heightened after Iranian forces reportedly seized ships, with local television broadcasting images of a commando boarding a cargo vessel in the Strait of Hormuz on Thursday. Additionally, Tehran has begun charging a $1 per barrel toll on oil tankers passing through the waterway, adding to market anxieties [1].
US President Donald Trump commented on Thursday that “the clock is ticking” for Iran to reach a deal, while the extension of the Israel-Lebanon ceasefire could potentially facilitate renewed negotiations. However, Iran continues to blame the US for the stalemate, citing the US blockade of Iranian ports, and there has been no news regarding the anticipated second round of talks in Pakistan [1].
On the supply side, the US Energy Information Administration (EIA) reported a 1.9 million barrel increase in commercial crude oil stocks for the week of April 17, contrary to expectations of a 1.2 million barrel drawdown. This unexpected inventory build contributed to the pullback in WTI prices from their highs [1].
CONCLUSION
WTI oil prices remain elevated due to persistent geopolitical risks and supply concerns, despite a recent pullback following a surprise increase in US crude inventories. The market continues to monitor developments in the Middle East and US-Iran relations, which are likely to drive further volatility in oil prices.