$99.00 Area: WTI at Five-Week Highs as Middle East Supply Risks Intensify

Five-week highs came within reach for WTI after Houthi attacks on Saudi oil infrastructure and Red Sea ports.
Global market risk is rising as potential US-Israeli strikes on Iranian energy facilities loom after the midterm elections.
Amid growing fears of regional conflict, Saudi Aramco reportedly instructed staff to leave its Dhahran headquarters.

West Texas Intermediate (WTI) trades around $98.80 per barrel. The oil benchmark is holding gains for a second consecutive day during Friday’s Asian session. Escalating Middle East tensions and risks to supply are keeping prices close to their highest level in five weeks.

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Responsibility for recent attacks on Saudi Arabia’s Red Sea port of Yanbu was claimed by Iran-backed Houthi militants in Yemen. The group also claimed deadly strikes on an oil field and an airport in the world’s largest crude exporter. Adding to concerns, reports indicate that the US and Israeli militaries have prepared plans for possible renewed strikes on Iran after next month’s midterm elections. Iranian energy infrastructure would likely be a principal target. In Europe, meanwhile, Ukrainian attacks on Russian oil refineries have intensified against the backdrop of a US-Russia agreement involving diesel supplies.

The accumulation of these threats is driving oil’s recent gains, energy market analysts stress. Reuters cited a note from energy advisory firm Ritterbusch and Associates, which said that "the complex is rebounding on another strong injection of risk premium related to an additional Houthi attack on Saudi infrastructure amid talk of a combined US-Israeli strike on Iran after the midterms."

Six sources familiar with the matter said Saudi state oil company Aramco had ordered employees to leave its headquarters in Dhahran on the Persian Gulf, underscoring the growing urgency on the ground. The company did not immediately reply to requests for comment. The order would represent Aramco’s first major evacuation since the conflict with Iran began.

“Starting with the oil moves” is how Deutsche Bank analysts describe their approach, noting that “several geopolitical headlines came through overnight that led to mounting concerns about a fresh escalation in the conflict.” They point to Brent’s recovery to near $110 per barrel, around a five-month high. Reports of possible US and Israel attacks on Iranian energy infrastructure, alongside continuing attacks in Saudi Arabia, are fuelling concerns that investors may now be factoring in oil prices remaining elevated well into 2027.

WTI Oil: Key Questions Answered

WTI Oil: Definition and Characteristics

Among the crude oils traded internationally, WTI stands for West Texas Intermediate. It is one of three main types, alongside Brent and Dubai Crude. Its relatively low gravity earns it the description “light”, while its low sulphur content makes it “sweet”. Regarded as a high-quality oil, it is easy to refine. WTI originates in the United States and reaches the market through the Cushing hub, known as “The Pipeline Crossroads of the World”. As an oil market benchmark, its price features frequently in media reports.

Key Drivers of WTI Oil Prices

Supply and demand underpin WTI oil prices, as they do prices across asset markets. Stronger global growth can lift demand, while weak growth can have the reverse effect. On the supply side, political instability, wars and sanctions can cause disruptions that affect prices. Decisions by OPEC, the group of major oil-producing countries, are another important influence. Because oil is traded predominantly in US Dollars, the currency’s value also affects WTI crude prices: a weaker US Dollar can make oil more affordable, while a stronger one can do the opposite.

Oil Inventories and Their Effect on WTI Prices

WTI prices respond to weekly oil inventory releases from the American Petroleum Institute (API) and the Energy Information Agency (EIA). Inventory movements indicate shifts in supply and demand. Falling stocks can signal stronger demand and push prices higher; rising stocks can point to greater supply and weigh on prices. The API releases its report every Tuesday, followed by the EIA the next day. The two reports typically produce similar results, with readings within 1% of each other 75% of the time. As the EIA is a government agency, its figures are regarded as more reliable.

OPEC’s Role in WTI Oil Pricing

At meetings held twice a year, the 12 oil-producing nations in OPEC (Organization of the Petroleum Exporting Countries) jointly set production quotas for members. These decisions frequently affect WTI prices. Lower quotas can constrain supply and lift oil prices, while increased OPEC production has the reverse effect. The wider OPEC+ group adds ten non-OPEC countries, most notably Russia.