Oil prices surge on Middle East conflict, WTI climbs above $110 to over three-year highs

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WTI price hit $110.73, the highest since June 2022, on Monday.
Crude Oil prices rise on supply fears as the Middle East conflict widens.
President Trump said higher oil prices are a “very small price to pay” for defeating Iran.

West Texas Intermediate (WTI) crude Oil price opened at a gap up, extending its winning streak for the fifth successive session, and is trading around $110.60 per barrel during the Asian hours on Monday. WTI price hit $110.73, the highest since June 2022, amid concerns that a prolonged Middle East conflict could disrupt global energy supplies over the longer term.

Middle Eastern producers cut output as the Strait of Hormuz remains closed due to the Iran war. Kuwait, a member of the Organization of the Petroleum Exporting Countries (OPEC), announced precautionary production cuts, while Iraq’s southern oil output dropped to 1.3 million barrels per day from 4.3 million.

Saad Sherida Al‑Kaabi, Qatar’s energy minister, told the Financial Times on Friday he expects Gulf producers to halt exports within weeks, potentially pushing oil to $150 per barrel.

The Telegraph reported on Sunday that US President Donald Trump said that the rise in oil prices is a “very small price to pay” for defeating Iran and ensuring global peace. Earlier, Trump posted on Truth Social that Iran’s only option is unconditional surrender and that after that happens, he will help select its next leader.

The Iran war has entered its second week with no clear resolution in sight. Mojtaba Khamenei was appointed Iran’s supreme leader just over a week after his father, Ali Khamenei, was killed in US-Israeli strikes, signaling that hardliners remain firmly in control. Last week, President Trump said the appointment would be “unacceptable” and suggested Washington should have a role in selecting Iran’s next supreme leader.

(The story was corrected on March 9 at 2:30 GMT to say in the title WTI rises to over three-year highs, not 54-month highs.)

WTI Oil FAQs

What is WTI Oil?

WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.

What factors drive the price of WTI Oil?

Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.

How does inventory data impact the price of WTI Oil

The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.

How does OPEC influence the price of WTI Oil?

OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.