23.06.2025 06:50

West Texas Intermediate (WTI) crude oil surged past $74.50 during Monday's Asian trading session, reaching its highest point since January. This sharp increase followed US airstrikes on Iranian facilities, igniting fears of significant disruptions to Middle Eastern oil supplies, a crucial factor in global energy markets. The escalating conflict between the US, Israel, and Iran, marked by targeted attacks on Iranian nuclear sites in Fordo, Natanz, and Isfahan, directly contributed to this price jump.

Adding further fuel to the fire, Iran's parliament voted to close the Strait of Hormuz, a vital waterway through which a fifth of the world's oil passes. This dramatic move underscores the potential for widespread supply chain disruptions and significant price volatility. Analysts at JP Morgan, for example, predict a potential surge to $130 per barrel if the Strait of Hormuz remains blocked due to prolonged conflict in the region. The oil market's future trajectory hinges on Iran's response to these recent attacks; its foreign minister has already stated that all options remain open to defend Iranian sovereignty.

However, countervailing forces might temper the WTI's upward momentum. Concerns about reduced global oil demand persist, potentially limiting price increases. Last week's International Energy Agency (IEA) monthly report lowered its forecast for global oil demand by 20,000 barrels per day, while simultaneously raising its supply estimate by 200,000 barrels per day to a total of 1.8 million barrels per day. Therefore, the ultimate price of WTI oil will depend on a complex interplay between geopolitical instability and fluctuating global demand. Oil traders will keenly observe Iran's reaction and the evolving situation in the Middle East to accurately gauge the market's direction.