West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $103.60 during early Asian trading hours on Tuesday, edging higher as geopolitical tensions escalate between the United States and Iran [1]. The price increase comes as traders react to US President Donald Trump's ultimatum for Iran to reopen the Strait of Hormuz or face major attacks on its civilian infrastructure. Trump described the latest US ceasefire proposal as 'not good enough,' but acknowledged it as a 'very significant step,' noting ongoing negotiations and warning that Iran could be 'taken out in one night,' with power plants 'burning, exploding and never to be used again' [1].
Iran has responded by threatening to ramp up its own attacks on energy infrastructure in the Gulf, raising concerns about severe supply disruptions in the Middle East and a heightened geopolitical risk premium that could further boost WTI prices in the near term [1]. Meanwhile, the Organization of the Petroleum Exporting Countries and allies (OPEC+) agreed on Sunday to increase production by 206,000 barrels per day (bpd) in May. However, uncertainty remains regarding how this additional oil will reach global markets with the Strait of Hormuz still closed [1].
Traders are also awaiting the release of the American Petroleum Institute (API) report later on Tuesday. The report's outcome could influence WTI prices: a larger-than-expected crude oil inventory draw would indicate stronger demand and potentially lift prices, while a bigger build than estimated would signal weaker demand or excess supply, possibly weighing on prices [1].
Overall, the combination of escalating US-Iran tensions, threats to critical energy infrastructure, and uncertainty over OPEC+ production increases is driving volatility and upward momentum in the WTI oil market [1].
CONCLUSION
WTI oil prices have surged above $103.50 as geopolitical risks intensify following President Trump's threats and Iran's retaliatory stance. The ongoing closure of the Strait of Hormuz and uncertainty over OPEC+ production increases are keeping traders on edge, with upcoming inventory data likely to further impact market direction. The situation signals high volatility and a strong risk premium for oil in the near term.