Strait of Hormuz to stay closed pending order from revolution’s leader, Iran says

Tehran has shut the Strait of Hormuz and will reopen it only on the orders of the leader of the revolution. Al Jazeera reported on Wednesday that Iranian Armed Forces Deputy Chief of Staff Brigadier General Kioumars Heidari made the statement.

The critical waterway will "never return" to its status before the US-Israel war on Iran, according to Iran's parliament speaker and top negotiator, Mohammad Bagher Ghalibaf.

In the view of senior Iranian officials, the US is preparing either additional military strikes or an increasingly tight economic stranglehold that will force Tehran to retaliate.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

In a separate development, a drone was intercepted and destroyed by the Saudi-led coalition over Saudi Arabia's oil-rich Eastern province as cross-border attacks intensified. The source added that debris fell following the destruction of two ballistic missiles targeting Mecca.

0.10% Decline in WTI

$85.25 is the price of West Texas Intermediate (WTI) at the time of writing, representing a 0.10% decline on the day.

WTI Oil: Key Questions Answered

WTI Oil: Definition and Characteristics

West Texas Intermediate, abbreviated to WTI, is one of three major crude oil types traded internationally, alongside Brent and Dubai Crude. Its relatively low gravity and sulphur content earn it the descriptions “light” and “sweet”, respectively. This high-quality oil is considered easy to refine. Produced in the United States, it is distributed through the Cushing hub, known as “The Pipeline Crossroads of the World”. WTI serves as an oil market benchmark, with its price regularly cited in media coverage.

WTI Oil Prices: Main Drivers

Supply and demand underpin WTI oil prices, as they do those of other assets. Stronger global growth can lift demand, while weaker growth can have the reverse effect. Supply disruptions arising from political instability, wars or sanctions can also affect prices. Another major influence is the output policy of OPEC, a group of leading oil-producing countries. WTI crude prices are also sensitive to the value of the US Dollar because oil is mainly traded in US Dollars. A weaker US Dollar can therefore make oil more affordable, while a stronger currency can have the opposite effect.

Weekly Inventories: Their Effect on WTI Oil Prices

WTI oil prices respond to weekly inventory reports from the American Petroleum Institute (API) and the Energy Information Agency (EIA). Stock movements reflect shifts in supply and demand: a decline can signal stronger demand and lift oil prices, whereas a build can indicate increased supply and weigh on prices. The API releases its report each Tuesday, followed by the EIA the next day. The two sets of figures tend to be similar, differing by no more than 1% in 75% of cases. As the EIA is a government agency, its data is regarded as more reliable.

12 Oil Producers: OPEC's Influence on WTI 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 affect WTI oil prices. Lower quotas can restrict supply and lift prices; increased production can have the reverse effect. The broader OPEC+ group adds ten non-OPEC members, with Russia the most prominent.