West Texas Intermediate (WTI) crude futures rose to trade above $91 per barrel yesterday, while Brent moved closer to the $97 mark. The rebound came after a prior session of declines, with traders pointing to a fresh round of tensions between the United States and Iran. The latest developments have also dented confidence that a near-term deal could be reached to end the confrontation and reopen the Strait of Hormuz.
Key takeaways
- WTI futures climbed back above $91 per barrel, following earlier selling.
- Brent futures were edging toward $97 per barrel amid renewed geopolitical risk.
- US-Iran tensions intensified after reports of strikes and drone interceptions linked to the Strait of Hormuz.
- Iran and the US exchanged accusations, underscoring the fragility of ongoing diplomacy.
- Price support has returned through higher risk premiums as investors reassess how soon peace could arrive.
Energy chokepoint in focus
The Strait of Hormuz remains one of the most critical energy transit routes in the world. About a fifth of global oil flows typically move through the waterway, meaning any threat to shipping there quickly becomes a central concern for energy traders and market participants focused on supply stability.
Reports said US forces struck an Iranian military site considered capable of threatening American personnel and commercial shipping lanes near the strait. The US operation was also described as including the interception of Iranian drones.
Iran’s response was to claim that its Revolutionary Guard targeted a US airbase, though officials did not provide the specific location. The back-and-forth highlighted how delicate negotiations remain, even with diplomatic efforts continuing behind the scenes.
Sticking points and shifting expectations
Washington and Tehran continue to disagree on several core issues. Iran has said it wants to retain influence over the Strait of Hormuz and to protect its nuclear program. The United States, meanwhile, opposes both of those positions.
With those differences still unresolved, investors have questioned whether a breakthrough can happen in the near future. That uncertainty has contributed to risk premiums returning to the oil market, helping underpin crude prices.
Political pressure increased further after President Donald Trump made pointed comments involving Oman and the future of the Strait of Hormuz. He dismissed any idea that would let regional powers manage shipping through the corridor, adding that the strait should stay open to all and be treated as part of international waters.
Trump’s remarks followed reporting that Iran and Oman had discussed an arrangement that would allow them to collect tolls from vessels passing through the route. He also warned that Oman must “behave” or face serious consequences, comments that quickly drew global attention. The message was widely read as reflecting Washington’s resolve to prevent any single country—or bloc—from gaining control over a key energy passage.
Weekly direction, ceasefire debate, and what comes next
Even with yesterday’s rebound, both Brent and WTI are still set to record a second straight weekly drop. Many traders continue to believe the US and Iran will eventually reach some form of agreement. A successful settlement, they argue, could lower tensions, reopen the Strait of Hormuz, and restore confidence in global energy shipments.
Trump has continued pushing for a negotiated outcome, though he has acknowledged that progress is slow. He recently accused Iran of seeking to postpone talks until after the US midterm elections.
At the same time, support for a ceasefire is not universal in Washington. Some Republican lawmakers have criticized reports of a potential 60-day truce, saying it could weaken or roll back military gains made during the conflict.
For now, the oil market appears caught between two competing forces: immediate concerns over supply disruptions and longer-term hopes for a negotiated peace. The next major move for Brent and WTI is likely to hinge on which side—risk fears or diplomatic optimism—ultimately gains the upper hand.
