West Texas Intermediate (WTI) Oil rallied nearly 5% on Thursday, reaching its highest level since May 21, as escalating tensions in the Middle East heightened concerns over already tight global oil supplies. At the time of reporting, WTI was trading around $99 per barrel, marking an increase of approximately 10.50% for the week so far [1].
The surge in prices followed a recent escalation between the United States and Iran, which has increased security risks around the Strait of Hormuz—a critical chokepoint for global oil shipments. Shipping in the region remains heavily restricted following the outbreak of war in late February. According to The Wall Street Journal, Iran has resumed production of ballistic missiles, further intensifying the situation. Iran’s Islamic Revolutionary Guard Corps (IRGC) claimed that the Strait of Hormuz is blocked and under its 'intelligent control and information dominance,' warning that any hostile presence would be targeted [1].
Supply concerns have also extended beyond the Strait of Hormuz. On Thursday, Iran-aligned Houthi forces seized Yemen’s port of Mocha, raising risks around the Red Sea and the Bab el-Mandeb Strait. However, a Houthi spokesperson stated that current operations are limited to specific targets and described them as defensive, assuring that navigation and international trade through the two waterways remain safe and uninterrupted [1].
On the supply side, the latest Energy Information Administration (EIA) report showed that US crude oil inventories fell by 391,000 barrels, missing expectations for a 1.6 million-barrel decline after a previous drop of 4.45 million barrels the week before. In its Short-Term Energy Outlook, the EIA raised its average WTI price forecast for 2026 to $84.65 per barrel and noted that global oil inventories have fallen by around 400 million barrels so far this year, with further declines expected as significant Middle Eastern production and exports remain offline [1].
OPEC provided a mixed outlook on demand, lowering its forecast for global oil demand growth in 2026 to 380,000 barrels per day from 580,000 bpd, but raising its 2027 growth estimate to 2.36 million bpd from 2.16 million bpd [1].
CONCLUSION
WTI Oil prices have surged to near $100 per barrel, driven by escalating Middle East tensions and ongoing supply disruptions. The market remains highly sensitive to geopolitical developments, with both the EIA and OPEC adjusting their forecasts in response to evolving risks. Continued instability in key shipping routes and production regions is likely to keep oil prices elevated in the near term.