Iran’s continuing attacks on oil tankers push WTI to a fresh monthly high near $100.50

Oil prices surge towards $100.50 as Iran continues its attacks on oil tankers.
The Bab al-Mandeb Strait and the Suez Canal could come under an expanded blockade, Iran warns.
Accusing the US of betrayal, Ukraine renews strikes on Russian oil infrastructure.

Oil's rally has taken West Texas Intermediate (WTI) futures on NYMEX to their highest level in over a month, with the contract trading 2.5% higher near $100.50. Prices are now within close reach of the almost five-month high of $102.11.

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Mounting risks to energy supplies are driving a sharp increase in the risk premium embedded in oil prices. Iran continues to attack oil tankers seeking passage through the Strait of Hormuz, a crucial chokepoint for almost 20% of global energy supply.

Two tankers were set ablaze by mines and stopped south of the Strait of Hormuz, Reuters reported, citing Iran's revolutionary guards' navy. The navy did not specify when the incident occurred.

Over the weekend, Iran said it was ready to retaliate against US-Israel attacks and warned that it could widen the blockade to include the Bab al-Mandeb Strait and the Suez Canal.

Hopes of increased energy supplies from Moscow have also weakened as Ukraine continues to attack Russian oil refineries. According to NBC news, Ukraine renewed these strikes after President Volodymyr Zelenskyy angrily accused the United States of betraying Kyiv through a “dangerous” withdrawal of support vital to its defence against Russia.

Can WTI Sustain Its Bullish Technical Bias?

WTI US Oil is trading at $100.49 on the daily chart, with its position above the 20-day exponential moving average (EMA) of $93.79 supporting a bullish near-term outlook. Despite recent volatility, the broader upward trend remains intact. At 66.38, the Relative Strength Index (14) remains in positive territory without reaching overbought levels. This points to continued positive upside momentum, although it is becoming increasingly stretched.

The first downside support lies at the 20-day EMA of $93.79. Should a corrective decline emerge, buyers are likely to defend the existing trend around this level. Holding above that underlying demand zone would favour buying on dips rather than aggressive selling. Any consolidation would then likely be viewed as a pause in the wider rally, not a reversal of the trend.

(An AI tool assisted in preparing the technical analysis for this story. Learn more.)

WTI Oil: Key Questions Answered

What Does WTI Oil Refer To?

Among the crude oil varieties traded internationally, WTI stands for West Texas Intermediate. Alongside Brent and Dubai Crude, it is one of the three major types. Its relatively low gravity earns it the description “light”, while its low sulphur content accounts for the term “sweet”. Regarded as a high-quality oil, WTI is straightforward to refine. It originates in the United States and is distributed through the Cushing hub, known as “The Pipeline Crossroads of the World”. WTI serves as an oil market benchmark, and its price is regularly cited in media coverage.

What Determines WTI Oil Prices?

Supply and demand underpin WTI oil prices, as they do prices across other assets. Stronger global growth can lift demand, whereas weaker growth can reduce it. Supply disruptions caused by political instability, wars or sanctions can also affect prices. Another important influence is the decision-making of OPEC, a group of major oil-producing countries. Since oil is traded mainly in US Dollars, the value of the US Dollar also matters for WTI crude oil prices: a weaker currency can make oil more affordable, while a stronger one can have the reverse effect.

Why Do Inventory Figures Affect WTI Oil Prices?

WTI oil prices respond to the weekly inventory reports issued by the American Petroleum Institute (API) and the Energy Information Agency (EIA), as stock movements signal shifts in supply and demand. A decline in inventories may point to stronger demand and lift oil prices. By contrast, rising stocks can indicate greater supply and weigh on prices. The API releases its report every Tuesday, followed by the EIA the next day. The two reports generally show similar results, coming within 1% of each other 75% of the time. As the EIA is a government agency, its figures are regarded as more reliable.

How Do OPEC Decisions Affect WTI Oil Prices?

At meetings held twice a year, the 12 oil-producing nations in OPEC (Organization of the Petroleum Exporting Countries) jointly set production quotas for member countries. These decisions frequently influence WTI oil prices. Lower quotas can constrain supply and lift prices, while an increase in OPEC production has the reverse effect. The broader OPEC+ grouping brings in ten additional non-OPEC members, with Russia the most notable among them.