FX.co ★ Der | CL/Crude Oil

West Texas Intermediate (WTI) crude oil prices rebounded during Asian trading hours on Thursday, hovering near $85.50 per barrel following a brief, modest pull in the previous session. The broader upward trajectory in global energy markets continues to be anchored by intensifying geopolitical instability in the Middle East, where diplomatic negotiations between the United States and Iran have hit a total impasse. Confrontations have escalated across critical regional maritime corridors, most notably within the Strait of Hormuz waterway. While U.S. President Donald Trump noted that commercial oil shipments continue to navigate the passage and indicated that the door remains open for eventual diplomatic engagement with Tehran, operational risks across the maritime choke point remain acutely elevated. Geopolitical risks deepened further after the United Arab Emirates suspended all economic and financial transactions with Iran, a decision triggered by alleged ballistic missile strikes targeting its territory. The move underscores the expanding regional dimensions of the conflict and adds another layer of institutional friction to cross-border commerce. Despite these severe economic sanctions, trade restrictions, and elevated security risks across key transit routes, Gulf producers have managed to sustain significant crude export volumes by deploying alternative land-based transport pipelines and utilizing discreet, non-traditional shipping methods to circumvent regional disruptions. Energy market analysts at TD Securities emphasize that the overarching backdrop for crude oil prices remains structurally fragile as geopolitical tensions intensify. The investment bank warns that ongoing vessel targeting, growing risks of broader military escalation, and stalled diplomatic talks keep energy markets exposed to heightened supply-side vulnerabilities. These factors ensure that a substantial war-risk premium remains embedded in spot prices for Brent crude, WTI, and refined petroleum products. Simultaneously, domestic supply dynamics within the United States present a contrasting, mixed fundamental picture. The latest weekly report from the U.S. Energy Information Administration (EIA) revealed that commercial crude oil inventories rose unexpectedly by 4.4 million barrels, reaching 428.8 million barrels. Conversely, refined products demonstrated tightening market conditions, as distillate stockpiles—which include critical industrial fuels such as diesel and heating oil—fell by 1.5 million barrels to hit a one-month low. This divergence between build-ups in domestic raw crude stockpiles and drawn-down refined product inventories highlights a complex market balance, where physical supply growth in North America clashes directly with geopolitical risk premiums originating from Middle Eastern transit channels.