WTI rebounds toward $73.50 as Iran's nuclear program uncertainty prevails
- WTI pares daily losses as US-Iran peace hopes fade after Tehran rejected claims of allowing IAEA inspectors.
- Iran’s Foreign Ministry said it had made no new commitments regarding nuclear inspections.
- Traffic through the Strait of Hormuz increased as Gulf exporters used alternative routes, while Iran shipped over 30 million barrels.
West Texas Intermediate (WTI) oil price extends losses for the second consecutive day, trading around $73.40 per barrel during the European hours on Tuesday. However, Crude oil prices pare its daily losses over persisting uncertainty surrounding Iran's nuclear program.
Tehran flatly denied a claim by US Vice-President JD Vance stating that Iran would allow International Atomic Energy Agency (IAEA) nuclear inspectors back into the country. Following the first round of bilateral talks in Washington aimed at permanently ending the conflict, Iran's foreign ministry clarified to state media that the government had made "no new commitments" regarding its nuclear inspection policies.
Oil prices declined as signs of progress in US–Iran peace talks eased supply concerns. Washington issued Iran a 60-day waiver to resume oil sales in international markets, fueling expectations of a quicker rise in global supply. Shipping activity through the Strait of Hormuz has increased, with exporters such as Kuwait and the United Arab Emirates relying on alternative routes, while Iran exported more than 30 million barrels during the past week.
The American Petroleum Institute (API) will release its weekly crude oil inventory report later on Tuesday. A larger-than-expected decline in crude stockpiles would signal stronger demand and could support WTI prices, whereas a bigger-than-forecast inventory build may point to weaker demand or oversupply, potentially weighing on WTI prices.
(This story was corrected on June 23 at 09:24 to say International Atomic Energy Agency (IAEA), not International Atomic Agency.)
WTI Oil FAQs
What is WTI Oil?
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.
What factors drive the price of WTI Oil?
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.
How does inventory data impact the price of WTI Oil
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.
How does OPEC influence the price of WTI Oil?
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.