At the time of writing, US West Texas Intermediate (WTI) crude oil was trading around $59.80 per barrel, up 1.60% on the day. Oil is recouping some of the losses lost in the previous two sessions as investors reassess geopolitical risks in the Middle East following more cautious comments from the White House on Iran.
US President Donald Trump said he backed down from threats of military action after receiving assurances that no further executions would take place and that the violence would subside. According to several sources cited by Reuters, Israel and other regional allies have also urged Washington to delay any intervention for fear of retaliation that could destabilize the region. These changes have helped reduce, at least in the near term, the geopolitical risk premium embedded in oil prices.
This improvement in sentiment came as markets feared a rapid escalation that could disrupt Iran’s oil production or impact key shipping lanes in the Persian Gulf. Iran remains a major player in the Organization of the Petroleum Exporting Countries (OPEC), and any significant disruption in the supply of this raw material would have immediate consequences for the balance of the global market. However, several analysts note that geopolitical risks have not completely disappeared, which is keeping investors on guard.
Despite this geopolitical support, market fundamentals continue to influence the medium-term outlook for WTI US Oil. Many analysts maintain a cautious or even bearish stance due to expectations of sturdy supply in 2026, even though OPEC’s earlier forecasts pointed to a more balanced market. The latest data on US oil stocks also revived concerns about oversupply in a context of demand that is still seen as volatile.
From a structural perspective, Shell released its Energy Security Scenarios 2026 report on Thursday, presenting an positive long-term outlook for global energy demand. According to the report, the demand for primary energy may augment significantly by 2050, which in the long run will support the augment in oil prices, Reuters reports. However, this long-term perspective contrasts with the short-term mood, which is dominated by oversupply dynamics.
Additionally, Reuters reported that the United States seized another tanker linked to Venezuela in the Caribbean, bringing the total number of ships under U.S. sanctions on Venezuelan oil to six. The move came ahead of Donald Trump’s scheduled meeting with opposition leader MarÃa Corina Machado, which highlighted Washington’s continued enforcement of sanctions, although the direct impact on global supply remains confined.
Overall, the current rebound in WTI US Oil prices mainly reflects fleeting relief on the geopolitical front, while concerns over global supply and demand conditions continue to limit the prospects for a more sustained upward move.
Frequently asked questions about WTI crude oil
WTI Oil is a type of crude oil sold on international markets. WTI stands for West Texas Intermediate, one of three main types, including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” due to its relatively low weight and low sulfur content. It is considered a high-quality oil that can be easily refined. It originates in the United States and is distributed through the Cushing Junction, considered the “Crossroads of the World.” It is a reference point for the crude oil market, and the WTI price is often quoted in the media.
Like all assets, supply and demand are key factors influencing the price of WTI crude oil. Therefore, global growth may drive increased demand and, conversely, tender global growth. Political instability, wars and sanctions can disrupt supply and affect prices. Another key factor shaping prices are the decisions of OPEC, the group of major oil-producing countries. The value of the US dollar affects the price of WTI crude oil because oil is mainly sold in US dollars, so a weaker US dollar can make oil more affordable and vice versa.
Weekly crude oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Administration (EIA) influence the price of WTI crude oil. Inventory changes reflect fluctuations in supply and demand. If the data shows a decline in inventories, it may indicate increased demand, which will result in an augment in the price of oil. Higher inventories may reflect increased supply, which causes prices to fall. The API report is published every Tuesday and the EIA report the following day. Their results are usually similar and are within 1% of each other 75% of the time. EIA data is considered more reliable because it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 oil-producing countries that jointly decide on production quotas for member countries at meetings held twice a year. Their decisions often influence the prices of WTI crude oil. When OPEC decides to cut quotas, it can tighten supply, which will push up oil prices. OPEC increasing production has the opposite effect. OPEC+ refers to an expanded group that includes ten additional non-OPEC members, the most notable of which is Russia.
