WTI climbs as Hormuz tensions escalate, Ghalibaf exit clouds US-Iran talks

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WTI climbs for a fourth day as Hormuz tensions fuel fears of prolonged supply disruptions.
Reports of Iran Parliament Speaker Mohammad Bagher Ghalibaf’s exit from talks dent US-Iran deal hopes.
US President Donald Trump threatens to “shoot and kill” boats placing mines in Hormuz.

West Texas Intermediate (WTI) Crude Oil trades higher on Thursday, extending gains for a fourth straight day as escalating tensions in the Strait of Hormuz continue to fuel concerns about global supply disruptions, keeping a geopolitical risk premium embedded in prices. At the time of writing, WTI is trading around $94.56 per barrel after hitting an intraday high near $97, up 2.8% on the day.

The latest leg higher follows a sharp deterioration in the geopolitical backdrop after reports that Mohammad Bagher Ghalibaf, Iran’s Parliament Speaker and lead negotiator, has resigned from the negotiating team following alleged interference by the Islamic Revolutionary Guard Corps (IRGC), according to Israel’s N12 News. The move highlights deepening divisions within Iran’s leadership and reduces the likelihood of near-term progress in US-Iran negotiations.

The situation remains tense as the Strait of Hormuz stays under a dual blockade by US forces and Iran. US President Donald Trump said on Truth Social that “we have total control over the Strait of Hormuz, no ship can enter or leave without the approval of the United States Navy.” He also added that he has ordered the Navy to “shoot and kill any boat” placing mines in the waterway, stating that the route is “sealed up tight” until Iran agrees to a deal.

Iranian officials have maintained a firm stance, insisting that the US must lift the naval blockade, which Tehran views as a violation of the ceasefire and a key obstacle to negotiations.

Meanwhile, The Washington Post, citing a Pentagon assessment, reported that it could take up to six months to fully clear mines from the strait, underscoring the risk of prolonged disruption to global Oil supply.

Iran is also maintaining pressure, with its Islamic Revolutionary Guard Corps (IRGC) reportedly seizing two vessels in the strait on Wednesday, according to shipping companies and the semi-official Tasnim news agency.

Looking ahead, traders will continue to track developments around the US-Iran conflict and any signals of de-escalation. In the near term, WTI is likely to remain highly sensitive to headlines from the Strait of Hormuz, with supply disruption risks expected to keep prices supported.

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.