WTI Crude Oil Falls Below $84.00 as Dollar Strengthens
West Texas Intermediate (WTI) crude oil prices have slipped below $84.00 on the back of a firmer US dollar, but the threat of deeper losses is being limited by rising tensions between the US and Iran.
The US dollar has been gaining ground since last week's low, which was its lowest level since May 14, due to concerns over inflation risks tied to volatile energy prices. This has made investors more cautious about holding onto USD-denominated commodities, including crude oil.
However, the escalating tensions between the US and Iran have injected a degree of uncertainty into the market, with Treasury Secretary Scott Bessent warning countries to cut their financial ties with Iran or face being cut off from the dollar-based system. Meanwhile, Iran has vowed to shut down all oil exports from the Gulf if the economic war continues.
US Defense Secretary Pete Hegseth also weighed in on Monday, stating that the US would not rule out using military force against Iran. This keeps the geopolitical risk premium in play and may continue to support crude oil prices.