West Texas Intermediate (WTI) US Oil traded around $97.20 per barrel on Thursday, marking a decline of 1.68% for the day after reaching an intraday high of $100.15. This pullback was driven by improving supply conditions, notably the United States' partial easing of sanctions on Venezuela, which allows companies to resume limited dealings with the country's state-owned oil firm. The resumption of crude flows from Iraq's Kirkuk fields to Turkey's Ceyhan port further supported global supply concerns [1].
Additionally, the White House announced a temporary waiver of the Jones Act, permitting foreign vessels to transport fuel between US ports for 60 days to improve domestic distribution and reduce logistical bottlenecks. The US Treasury also signaled potential further measures to boost supply, such as lifting restrictions on certain Iranian oil volumes or tapping into strategic reserves, which contributed to capping price gains [1].
Despite these bearish supply-side developments, geopolitical risks continue to exert upward pressure on oil prices. Tensions in the Middle East have intensified following Israeli strikes on Iran’s South Pars gas field and subsequent Iranian retaliation targeting energy infrastructure in Qatar. Attacks have also been reported on facilities in Saudi Arabia and the United Arab Emirates (UAE), raising fears of significant disruptions to global energy supply [1].
A joint statement from the United Kingdom, France, Germany, Italy, the Netherlands, and Japan emphasized their commitment to stabilizing energy markets. The signatories expressed readiness to work with producer countries to increase supply and ensure the security of transit through the Strait of Hormuz, while urging Iran to cease threats and attacks against energy infrastructure and maritime transport [1]. Rabobank noted that these developments create structural risks for energy markets, with potential damage to key infrastructure and the threat of lasting supply reductions. The bank also highlighted the risk of further market fragmentation, especially if the US imposes restrictions on oil exports [1].
In summary, while supply-side improvements have limited downside pressure on WTI, the elevated geopolitical risk premium continues to support prices near key psychological levels [1].
CONCLUSION
WTI oil prices have retreated from recent highs due to improved supply conditions, including eased US sanctions on Venezuela and resumed flows from Iraq. However, persistent geopolitical tensions in the Middle East are maintaining an elevated risk premium, keeping prices near critical levels. The market remains highly sensitive to both supply developments and geopolitical risks.