West Texas Intermediate (WTI), the US crude oil benchmark, surged to nearly $105.00 during Asian trading hours on Monday, marking its highest level in almost four years. This sharp rise is attributed to escalating conflict in the Middle East, specifically the closure of the Strait of Hormuz—a critical chokepoint responsible for handling 20% of global oil supply—due to the US-Iran standoff [1].
US President Donald Trump announced on Sunday that the US would target Iran's power plants and bridges on Tuesday if the Strait of Hormuz is not reopened. In response, Iran's foreign ministry stated it would reciprocate by targeting similar US infrastructure [1]. The closure of the Strait has created an immediate physical supply shortage, fueling the rally in WTI prices [1].
Traders are also awaiting the release of the American Petroleum Institute (API) report, scheduled for Tuesday, which could further influence oil prices depending on inventory data [1]. Meanwhile, OPEC+ decided on Sunday to increase oil output by 206,000 barrels per day in May. However, this increase is largely symbolic, as some key members are unable to raise production due to the ongoing US-Israeli war on Iran. OPEC+ is set to meet again on May 3 to reassess production decisions [1].
The combination of geopolitical tensions, supply disruptions, and limited ability for OPEC+ to offset shortages has created a bullish environment for oil markets, with WTI prices reflecting heightened risk and scarcity [1].
CONCLUSION
WTI crude oil prices have soared to their highest levels in nearly four years amid escalating US-Iran tensions and the closure of the Strait of Hormuz. The immediate supply shortage and limited OPEC+ response have significantly boosted market sentiment. Traders are closely watching upcoming inventory data and further OPEC+ decisions for additional market direction.