West Texas Intermediate (WTI) Oil price eases after two consecutive sessions of gains, trading near $66.40 per barrel during Asian hours on Friday. The benchmark WTI retreated after touching a six-month high of $66.82 earlier in the day, supported by escalating supply concerns linked to tensions between the United States (US) and Iran.
According to the BBC, US President Donald Trump warned that Iran must reach an agreement or face “bad things,” keeping the threat of military action over fragile nuclear negotiations. Iran, in turn, informed UN Secretary-General Antonio Guterres that it does not seek conflict but will respond to any military aggression.
Crude Oil prices could regain traction as reports indicate US officials are considering a potential military operation in the Middle East, while Israel continues to advocate for regime change in Tehran. The head of the UN nuclear watchdog cautioned that Iran’s window for a diplomatic resolution is narrowing amid a US military buildup. Any escalation risks disrupting flows through the Strait of Hormuz, a critical chokepoint that handles roughly 20% of global Oil shipments.
A Reuters report suggests that the geopolitical premium embedded in crude prices due to US-Iran tensions remains fluid, though markets broadly assume the situation will ultimately stabilize. Estimates place the current risk premium at around $7–$10 per barrel, reflecting concerns that negotiations could collapse, while still implying limited expectations of major supply disruptions through the Strait of Hormuz.
Meanwhile, fresh data from the US Energy Information Administration (EIA) showed US Crude Oil Stocks dropped by 9.014M barrels in the last week, sharply contrasting with market forecasts for a 2.1M-barrel build that would have offset the prior week’s 8.53M increase.
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