West Texas Intermediate (WTI) crude oil prices remained in negative territory for the second consecutive day, trading around $82.60 per barrel during Asian hours on Friday [1]. The decline in prices follows renewed hopes for a diplomatic solution to the US-Iran conflict, with Pakistan's Foreign Ministry spokesperson Tahir Andrabi confirming ongoing negotiations between the United States and Iran aimed at restoring stability, particularly in the critical Strait of Hormuz [1].
Shipping activity through the Strait of Hormuz has increased recently, as the US Navy successfully escorted several tankers across the waterway, allowing millions of barrels of crude to pass safely after a prior slowdown [1]. Efforts to secure regional water transport have also expanded into the Red Sea, where Saudi Arabia held talks with representatives from 43 countries to discuss forming a maritime coalition to safeguard key shipping routes. This initiative comes after a blockade imposed last week by Iran-backed Houthi militants, which threatened commercial trade in the region [1].
Despite the recent dip, WTI crude remains on track to post a monthly gain of over 18%, driven by fears that renewed fighting between the US and Iran could trigger further disruptions to Middle Eastern energy supplies. The US military recently launched fresh strikes on Iranian targets in response to Tehran’s attacks on US assets across the region [1].
Further compounding supply risks, Kazakhstan's primary oil export terminal in the Black Sea was closed for the third time this month after Ukrainian drones struck two vessels near Russia's Novorossiysk port, suspending crude tanker loadings [1]. According to TD Securities, the risk backdrop in the oil market continues to deteriorate, with the bank cautioning that 'supply risks keep piling up' even as investors focus on positioning and short-term flows. The firm argues that the accumulation of disruptions and geopolitical flashpoints is increasingly difficult to ignore, reinforcing its view that tightening physical balances should remain a key driver for crude prices [1].
CONCLUSION
WTI crude prices are under pressure amid renewed diplomatic efforts between the US and Iran, but ongoing geopolitical risks and supply disruptions continue to support a bullish outlook. Market participants remain focused on the potential for further instability in key energy corridors, with analysts warning that tightening physical balances could drive prices higher.