West Texas Intermediate (WTI) crude oil prices rebounded to around $90.60 per barrel during Asian trading hours on Tuesday, following four consecutive days of losses. This recovery was driven by renewed supply concerns after US forces conducted self-defense strikes in southern Iran on Monday, targeting missile launch sites and Iranian vessels attempting to deploy mines, according to a US Central Command spokesperson cited by Fox News. Iranian media reported explosions in the coastal city of Bandar Abbas and nearby areas close to the Strait of Hormuz, a critical chokepoint for global oil shipments [1].
On Monday, WTI prices had declined by over 6% after Bloomberg reported that US President Donald Trump stated negotiations with Iran to end the conflict and reopen the Strait of Hormuz were 'proceeding nicely.' However, President Trump also warned that a collapse in talks could lead to renewed military action, even as a Pakistani mediator reportedly told China that an agreement was near [1].
Currently, the United States and Iran are discussing a framework to extend the ceasefire for approximately two months. Under this potential arrangement, Washington would lift its maritime blockade and Tehran would reopen the Strait of Hormuz. Both sides have indicated progress on a memorandum of understanding aimed at halting the conflict and providing a 60-day window to finalize a peace deal. Reflecting this tentative de-escalation, ship-tracking data showed three liquefied natural gas tankers recently crossed the strait bound for Pakistan, China, and India, and a supertanker carrying Iraqi crude oil departed for China after being stranded for nearly three months [1].
The market reaction to these developments has been significant, with WTI rebounding sharply on supply concerns despite the ongoing negotiations. The situation remains fluid, with the potential for further volatility depending on the outcome of talks and any additional military actions [1].
CONCLUSION
WTI oil prices have rebounded on renewed supply concerns following US strikes in southern Iran, despite ongoing negotiations aimed at extending the ceasefire and reopening the Strait of Hormuz. The market remains sensitive to developments in the region, with further price volatility likely depending on the progress of diplomatic efforts and the risk of additional military escalation.