FX.co ★ Crude | CL/Crude Oil

West Texas Intermediate (WTI) crude oil prices have recently dipped slightly, trading around $90.40 per barrel in Asian trading on Tuesday. However, fundamental indicators suggest the oil market could quickly resume its upward momentum. A key factor supporting oil prices is the escalating geopolitical tensions in the Middle East, particularly after Iran threatened to strike regional energy infrastructure in direct retaliation for US military operations against its assets. This belligerent stance represents a dangerous escalation of the ongoing conflict, which has severely constrained regional energy production and exacerbated pressure on global supply chains. Market participants are well aware that any continued disruption to vital shipping lanes could cripple exports, a factor that contributed to the nearly 10% rise in crude oil prices last week, a surge further fueled by hostile activity near the strategic waters of the Strait of Hormuz. Adding to the tension was a series of security incidents over the weekend, including escalating military clashes around commercial and naval vessels, and local attacks—such as the repeated attacks near Saudi Aramco facilities in the Jizan region near the Red Sea—which, although causing only limited material damage, continued to worry traders. To make matters worse, reports indicate that negotiations between Tehran and Oman regarding the management of navigation in the Strait of Hormuz are nearing their conclusion, exacerbating international concerns about Iran consolidating its strategic control over this vital oil shipping lane. Meanwhile, the United States, the world's largest producer and consumer of oil, is facing significant pressure on its domestic inventories. Analysts at PVM Energy point out that US gasoline and distillate fuel stocks are well below their levels at the same time last year and also below the seasonal averages for the past five years. Although these overlapping risks could lead to a larger supply shock, oil continues to flow in the Arabian Gulf, with an estimated 7 million barrels of crude oil and refined products still transiting the Strait of Hormuz daily. Financial institutions and market analysts, including experts from Société Générale, believe the overall technical uptrend for global crude oil prices, such as Brent, remains strong, noting the absence of clear signs of a major market correction at present. Market observers emphasize that last week's technical low near $89 still represents reliable short-term support, indicating that current downside risks have been adequately contained. With ongoing geopolitical competition and insufficient oil inventories, the combined effects of declining domestic reserves and persistent regional instability make crude oil prices highly sensitive to any sudden shifts in the Middle East.