West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $86.00 during early Asian trading hours on Tuesday, maintaining levels near one-month highs as market participants assess ongoing developments in the Middle East [1]. US President Donald Trump has threatened what he described as the 'most crushing economic operation' against Iran, warning that any country whose financial institutions, businesses, airports, or government entities assist Tehran will face penalties [1]. In response, Iranian Foreign Minister Abbas Araghchi condemned the US threat, labeling the proposed sanctions as 'illegal and inhumane' [1].
The US Central Command (CENTCOM) reported redirecting 67 merchant ships, disabling three, and boarding two others traveling to or from Iranian ports as part of enforcing a revived naval blockade, further escalating tensions in the region [1]. Analysts suggest that a significant escalation in the US-Iran conflict could heighten fears over oil supply disruptions, potentially supporting WTI prices in the near term [1].
Despite these geopolitical risks, US crude oil inventories rose by 4.405 million barrels for the week ending August 14, according to the US Energy Information Administration (EIA), surpassing market expectations for a 600,000-barrel decline. This inventory build follows a previous surge of 17.422 million barrels, and may act to cap further upside in oil prices [1].
TD Securities highlights that crude flows remain critically tight, with negotiations stalled and a shift toward economic pressure reinforcing ongoing supply risks. The bank also notes that 'Iranian aggression in the Oman lane will likely remain the norm,' emphasizing persistent geopolitical threats to oil supply and contributing to a bullish outlook for oil fundamentals [1]. Technical analysis indicates a constructive near-term bias for WTI, with the price above the 100-day simple moving average and the Relative Strength Index (14) at 59.00, suggesting steady bullish momentum without overbought conditions. Immediate resistance is identified at $88.18, with support at $85.85 and further downside levels at $81.20 and $74.25 [1].
CONCLUSION
WTI prices are being supported by escalating US-Iran tensions and persistent supply risks, despite a larger-than-expected US crude inventory build. The market remains focused on geopolitical developments, with technical indicators pointing to continued bullish momentum in the near term.