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US intelligence showed that Iran's leadership is still mostly intact and is not at risk of collapse any time soon after over two weeks of nonstop US and Israeli bombardment, Reuters reported on Wednesday.
Due to mounting political pressure over soaring oil prices, US President Donald Trump signaled that the largest U.S. military mission since 2003 may finish “soon.” However, if Iran's hardline leaders remain firmly entrenched, it may be challenging to find a peaceful conclusion to the conflict.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is up 5.50% on the day at $91.78.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
- WTI price jumps to near $92.65 in Thursday’s early Asian session.
- Supply disruption fears continue to boost the WTI price.
- The US plans to release 172 million barrels of oil from the Strategic Petroleum Reserve.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $92.65 during the early Asian trading hours on Thursday. The WTI price climbs over 6.5% on the day as fresh attacks on ships in the Strait of Hormuz worsen supply disruption fears.
The war between its neighbor Iran and the US and Israel escalates, boosting oil prices. Reuters reported that three more vessels have been hit by projectiles in the Strait of Hormuz. That brought the number of ships struck in the region to at least 14 since the Iran war began.
Analysts said the International Energy Agency's (IEA proposal for a record release of oil reserves is inadequate to ease those worries. The IEA on Wednesday announced the release of 400 million barrels of oil, the largest such move in its history, to try to rein in energy prices. The time frame for the release will be decided in due course.
Furthermore, US President Donald Trump plans to release 172 million barrels from the US emergency oil reserve as part of the coordinated effort by nations around the world to ease soaring crude and gasoline prices amid the Iran war.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
The US President Donald Trump administration plans to release 172 million barrels from the US emergency oil reserve as part of the coordinated effort by nations around the world to ease soaring crude and gasoline prices amid the Iran war, Bloomberg reported on Wednesday.
The oil will come from the US Energy Department’s Strategic Petroleum Reserve. It’s part of the plan by member nations of the International Energy Agency (IEA) to discharge a total 400 million barrels from reserves globally. Deliveries are expected to begin next week and continue over roughly 120 days.
Market reaction
Crude oil prices climb following this developments. At the time of writing, the West Texas Intermediate (WTI) is up 4.38% on the day at $90.80.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
US President Donald Trump said on Wednesday that the US knocked out Iran's navy and leaders. Trump added that the International Energy Agency (IEA) decision to release oil from reserves will substantially reduce oil prices.
Key quotes
We've knocked out Iran's navy and leaders.
We're using our military well.
We did an excursion to get rid of evil people.
Destroyed 58 Iranian naval ships.
International Energy Agency decision to release oil from reserve will substantially reduce the oil prices.
We do not want to return every two years.
We are not leaving until the job is finished.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is up 2.47% on the day at $87.38, retreating from over three-year highs of $113.28 reached earlier this week.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
Naval drones have been used in attacks on oil tankers in the Gulf region since war erupted between the United States (US), Israel and Iran, suggesting a dangerous new threat in the key shipping lane, Reuters reported on Wednesday.
Iran is suspected in attacks, as Tehran has previously showcased its naval drone capabilities at military displays.
Iran warned that the world should be ready for oil at $200 a barrel as its forces hit merchant ships on Wednesday and as shipping through the Strait of Hormuz has come to a near standstill.
Elsewhere, a drone assault hit a major US diplomatic facility in Iraq on Tuesday in a suspected retaliation by pro-Tehran militias to the US and Israel’s war on Iran, according tothe Washington Post. Iraqi official stated that oil ports have completely stopped operations and commercial ports continue to operate after attack on fuel tanker.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is up 2.47% on the day at $87.38, retreating from over three-year highs of $113.28 reached earlier this week.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
RaboResearch highlights that US rare earths inventories may cover only about two months after depletion from the Iran conflict, potentially giving China significant leverage. The report suggests rare earth supplies could shape the duration of US strikes on Iran and constrain US policy options, raising the risk of further escalation or unconventional strategic responses.
Short US inventories and Chinese bargaining power
"It claims that after depletion in this war, the US has only around two months of rare earths inventory, and “supplies would dominate talks when Trump sat down with Chinese President Xi Jinping.” This is obviously of critical importance."
"If so, the US response *might* again be threatened escalation to deescalate: in short, to make clear to China, one way or another, that the recent chaos in energy markets can get worse again if there were to be any problems with its rare earths supply."
"Moreover, there are already suggestions Beijing, despite geopolitical alignment with Tehran, sees stability and the flow of oil as the more important metric. That might end up in a good place, both on energy and on US-China relations, but it could also make for some wild headlines and price action on the way there. It’s certainly a tail risk worth considering."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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