WTI declines despite rising US-Iran tensions threaten

West Texas Intermediate (WTI) oil price depreciates after three days of gains, trading around $93.90 during Asian hours on Thursday. However, oil prices may soon regain ground as an intensifying conflict between the United States and Iran raises serious concerns over potential disruptions to energy supplies from the Middle East. Signaling that a resolution is far off.

Iran stated that it is ready for a more intense conflict, vowing to resist the US naval blockade and warning that it will step up attacks if American forces continue their strikes on Iranian territory.

Meanwhile, US President Donald Trump predicted that the conflict will likely persist past the November midterm elections, noting that significant relief in gasoline prices is unlikely before then and signaling limited prospects for near-term de-escalation.

Hostilities have rapidly escalated over the past week following roughly a month of relative calm, with both nations stepping up attacks. The geopolitical crisis further broadened after Iran-backed Houthi militants launched strikes on several energy facilities in Saudi Arabia, which prompted the temporary suspension of some operations in the region.

According to strategists at TD Securities, crude prices continue to push higher as geopolitical tensions show little sign of easing, with “crude rallies with seemingly no end to conflict in sight.” They argue that “another round of escalation and an apparent preference for limited attacks and economic squeeze as opposed to deal-making leaves the energy market on a continued tightening trajectory,” reinforcing the view that ongoing conflict dynamics are keeping supply risks elevated and the balance of risks for Oil skewed to the upside.