FX.co ★ CL/Crude Oil

West Texas Intermediate (WTI) crude, the US benchmark, regained its upward momentum in Asian trading on Tuesday, reaching around $98.40 per barrel, successfully recovering from the slight losses incurred the previous day. Energy market participants are closely monitoring escalating geopolitical conflicts in the Middle East and Eastern Europe against signs of stable oil supplies in the Arabian Gulf. In the Middle East, ongoing hostilities in and around the Strait of Hormuz continue to dominate market sentiment. Iranian authorities maintain their hardline stance on maritime navigation, while international shipping agencies have confirmed continued targeted attacks on commercial vessels in the region. The escalating military conflict between Saudi armed forces and the Iranian-backed Houthi group in Yemen, coupled with simultaneous attacks on cross-border infrastructure between Russia and Ukraine, directly impacts regional energy facilities, further exacerbating these serious security risks and keeping concerns about supply disruptions at the forefront of traders' minds. Data from commodity analytics firm Kpler highlights the tangible impact of these security threats on global supply chains. Data shows a sharp decline in crude oil flows through key Middle Eastern waterways last week, reaching a seven-day average of approximately 8.5 million barrels per day (mb/d), a significant drop compared to the pre-crisis average of over 20 mb/d. Simultaneously, at least ten hostile incidents involving commercial vessels occurred. Despite the severe local disruptions, the supply chain has demonstrated remarkable resilience and is beginning to stabilize. U.S. Energy Secretary Chris Wright reported that oil shipments in the Arabian Gulf have successfully recovered to about 80% of their pre-conflict capacity, although deliveries of refined products continue to face logistical constraints. In an effort to promote the normalization of global energy distribution and mitigate sharp price volatility, the Trump administration authorized the legal sale and operation of previously sanctioned oil tankers. This strategic regulatory measure aims to reintegrate approximately 1,600 unlicensed oil tankers globally into legitimate commercial shipping channels. Furthermore, diplomatic and regulatory adjustments have contributed to easing pressure on the international energy market. President Trump’s decision to grant temporary waivers from some Russian sanctions has significantly eased concerns about energy supplies and prices among major importers, particularly India. India remains one of the world’s largest consumers of Russian crude oil. This practical diplomatic move is expected to bolster bilateral trade relations between New Delhi and Washington, increasing the likelihood of a comprehensive bilateral trade agreement, while removing a major source of upward pressure on global crude oil prices. As traders weigh these factors—the increased value of regulatory waivers amid escalating regional security tensions and the recovery of Gulf exports—crude oil prices continue to fluctuate near their highest levels in several weeks, reflecting the market’s balancing act between significant geopolitical fragility and the resilience of physical supply adjustments.