WTI holds ground around $84.50 as supply risks increase due to US-Iran peace uncertainty

West Texas Intermediate (WTI) oil prices hovered around $84.50 per barrel on Wednesday as geopolitical tensions between the US and Iran persisted. Market uncertainty over a potential resolution to the conflict and the reopening of the Strait of Hormuz kept prices stable. US President Donald Trump confirmed the continued naval blockade in the region, with no active negotiations in place.

Iran's military actions against ships from Saudi Arabia and the United Arab Emirates, totaling eight attacks this month, have caused significant disruption to maritime traffic. Iraq recently approved new export methods, allowing the country to bypass the affected Strait and route its crude oil through alternative channels. Deutsche Bank analysts noted the lack of progress in negotiations to reopen the Strait of Hormuz, which supports the upward trend in Brent futures and highlights the potential for prolonged elevated energy costs.

WTI, a high-quality crude oil sourced in the United States, is a key benchmark in the oil market. Supply and demand, political instability, wars, sanctions, and the decisions of OPEC, a consortium of major oil-producing nations, are crucial factors influencing WTI prices. Changes in oil inventories, as reported by the American Petroleum Institute and the Energy Information Agency, also impact the price.

OPEC meetings, where they decide production quotas for member countries, further impact WTI prices. When OPEC decides to reduce quotas, it tightens supply and pushes up oil prices. On the other hand, increasing production has the opposite effect.