WTI Price Soars on Supply Tightness Amid Ongoing Tensions
The West Texas Intermediate (WTI) oil price remains firm due to ongoing supply tightness, which has pushed prices above $90. The global energy supply is being squeezed by the closure of two strategic waterways: the Strait of Hormuz and the Bab el-Mandeb Strait. These two straits account for 27% of the world's energy supply.
The US and Iran have yet to resume talks on reopening the Strait of Hormuz, and tensions between the two nations remain high. President Donald Trump has warned that any country maintaining ties with Iran will face severe economic consequences.
Analysts at Danske Bank suggest that the US is attempting to impose the 'toughest sanctions in history' on Iran. However, they also note that a stronger sanctions push may actually reduce the likelihood of further military escalation and misinterpretation by oil markets.