West Texas Intermediate (WTI), the US crude oil benchmark, advanced to approximately $92.90 during early European trading hours on Wednesday, driven by escalating geopolitical tensions and supply concerns [1]. The price increase follows reports that Iran launched ballistic missiles toward regional neighbors Kuwait and Bahrain, though the missiles failed to hit their intended targets, according to the United States Central Command (CENTCOM) [1]. In response to these attempted attacks, American forces conducted strikes on Iran's Qeshm Island [1].
Market sentiment was further influenced by uncertainty surrounding the possibility of a peace deal between the United States and Iran. Iranian media reported that Tehran has not communicated with Washington for several days, while former US President Donald Trump claimed negotiations had been ongoing continuously [1]. Analyst Emril Jamil from LSEG noted that the stalling in US-Iran negotiations, combined with International Energy Agency (IEA) warnings of critically low global oil stock levels, is adding a risk premium to benchmark oil prices [1].
On the supply side, US crude oil inventories continued to decline. The American Petroleum Institute (API) reported that US crude oil stockpiles fell by 6.75 million barrels for the week ending May 29, a sharper drop compared to the previous week's 2.8 million barrel decline and well above the market consensus of a 3.6 million barrel decrease [1]. The Energy Information Administration (EIA) report is expected to be released later on Wednesday [1].
The combination of heightened geopolitical risks in the Middle East and tightening US crude inventories has raised fears of potential supply disruptions, supporting the upward movement in WTI prices [1].
CONCLUSION
WTI prices surged near $93.00 amid escalating tensions between the US and Iran and a significant drop in US crude inventories. Analysts highlight that ongoing geopolitical risks and critically low stock levels are likely to sustain upward pressure on oil prices in the near term.