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WTI holds near $81 as traders weigh US-Iran talks and Red Sea risk

WTI’s direction may also hinge on the FOMC decision Wednesday, which could shift USD moves that feed into dollar-priced commodities.

Reported · Written up by our desk · Energy

WTI crude is consolidating after a heavy selloff, trading around $81.00 as traders wait for clearer Middle East developments before taking new bets, FXStreet reports. The move comes after recent hopes of easing regional supply disruptions. Diplomatic efforts picked up after the US paused its bombing campaign against Iran late on Friday, following roughly two weeks of strikes, and US President Donald Trump said on Monday the US was having good talks with Iran and there was a chance of a resolution. Market participants see the potential for renewed negotiations and more normalized energy flows as a factor weighing on crude prices. Attention has also shifted to the Bab el-Mandeb Strait, after Yemen’s Iran-backed Houthis announced a maritime blockade against Saudi Arabia and attacked Saudi oil installations along the Red Sea. Separately, restricted transit through the Strait of Hormuz continues to raise concerns about significant disruptions to global oil supplies, supporting crude pricing and encouraging caution for aggressive bearish positioning. FXStreet adds that analysts at MUFG said key risks have not fully dissipated, noting it remains unclear how long the US pause in military strikes will last and how quickly traffic through the Strait of Hormuz will resume. Beyond geopolitics, traders are looking to a two-day FOMC policy meeting, with the central bank set to decide Wednesday, which could influence the US dollar and provide fresh momentum for USD-denominated commodities like crude oil.

Latest closeWTI crude $81.92 ▼8.3%

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