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WTI rises toward $87 as US-Iran tensions boost supply risk premium
WTI was up 1.76% to around $86.95, with analysts pointing to weekend escalation between the US and Iran as a key driver.
WTI oil extended its rebound for a second straight day, rising 1.76% to trade near $86.95 as renewed US-Iran hostilities heightened concerns about global crude supply, FXStreet reports.
The latest developments include US forces striking two Iranian rocket launchers on Larak Island in the Strait of Hormuz on Sunday, followed by Tehran targeting US facilities in Jordan. US President Donald Trump warned additional military action remains possible, while threats against Kharg Island, a key site for Iranian oil exports, kept investors focused on potential disruption risks.
Risk also spread beyond crude to fuel markets as Ukrainian drone and missile attacks hit Russian refineries, raising worries about refined product availability. FXStreet notes reduced Russian refining capacity and supply risks from the Middle East are supporting refining margins.
Despite the elevated tension around the Strait of Hormuz, oil flows have not fully stopped, with major Gulf producers such as Saudi Arabia, the United Arab Emirates, Kuwait and Iraq continuing to ship portions of their volumes. Deutsche Bank cited the weekend escalation between the US and Iran, including their first exchange of strikes since late July, as a primary factor behind the move higher in yields.
Latest closeWTI crude $86.62 ▲3.9%