West Texas Intermediate (WTI) crude oil prices remained in negative territory, trading around $97.60 per barrel during Asian hours on Friday, following modest gains the previous day [1]. Despite the slight dip, WTI is on track to rise more than 6% for the week, driven by ongoing tensions between the United States and Iran that have left the strategically vital Strait of Hormuz effectively closed [1]. Market anxiety persists due to recent ship seizures and attacks, even as Iranian state media reported that 30 vessels successfully navigated the Strait, temporarily alleviating some concerns [1].
The 'dual blockade' of the Strait of Hormuz continues to be a major obstacle in diplomatic negotiations. US President Donald Trump described the current ceasefire as being on 'massive life support' after rejecting Tehran's latest response to his peace proposal [1]. In a potential shift in global energy trade, a two-hour summit in Beijing between Presidents Trump and Xi Jinping resulted in President Xi expressing interest in purchasing more American oil to diversify China's energy sources and reduce reliance on the volatile Strait [1].
The supply outlook remains bleak, with the International Energy Agency (IEA) reporting that crude and fuel flows through the Strait of Hormuz dropped by approximately 4 million barrels per day during March and April [1]. The IEA further warned that even if the conflict is resolved by next month, the global oil market could remain significantly undersupplied through October [1].
Overall, the combination of geopolitical tensions, supply disruptions, and uncertain diplomatic progress has kept oil market volatility elevated, with WTI prices reflecting ongoing concerns about future supply security [1].
CONCLUSION
WTI crude prices are under pressure amid persistent geopolitical tensions and significant supply disruptions in the Strait of Hormuz. Despite some vessels passing through, market sentiment remains cautious due to ongoing risks and a grim supply outlook. The situation continues to drive volatility and could keep the oil market undersupplied in the coming months.