WTI crude traded near $93.20 a barrel in Asian hours on Wednesday, giving back gains from the previous session. Markets awaited the US Energy Information Administration report due later on Wednesday. Prices eased after Iraq agreed to resume exports through Turkey’s Ceyhan port. Iran also allowed safe passage for some vessels based on affiliation, reducing near-term disruption worries. The United States stepped up efforts to reopen the Strait of Hormuz, after allies declined President Donald Trump’s request to help protect shipping. The route remains a key channel for oil transport. The American Petroleum Institute said US crude stocks rose by 6.6 million barrels for the week ending 13 March. That followed a 1.7 million-barrel draw the prior week and differed from forecasts for a 600,000-barrel fall. Reuters reported US forces struck Iranian coastal sites near the Strait of Hormuz over anti-ship missile concerns. The BBC said Israel claimed strikes that killed senior Iranian officials, including Ali Larijani and Basij chief Gholamreza Soleimani. The Guardian reported Iran attacked oil and gas production facilities in the United Arab Emirates and Iraq. The report said the targets were upstream sites rather than refineries or storage. WTI, or West Texas Intermediate, is a US-produced crude benchmark traded via the Cushing hub. Prices mainly follow supply and demand, as well as OPEC output decisions and the US dollar. Weekly inventory data from API (Tuesday) and EIA (Wednesday) can move prices by signalling supply changes. Their results are within 1% of each other 75% of the time, and EIA data is generally treated as more reliable. We are seeing WTI oil prices pull back to around $93.20, which seems to be a short-term reaction to news about renewed Iraqi exports and a significant build in US crude inventories. This dip is likely temporary as the market digests the weekly supply data. Traders should watch the upcoming EIA report closely, as a confirmation of the large inventory increase could offer a better entry point. The underlying geopolitical risk is far more significant than these weekly data points. Last year, in 2025, we saw a major escalation with direct attacks on oil production facilities in the UAE and Iraq, which is a much greater threat than targeting tankers or storage sites. These events, combined with the killing of senior Iranian officials, have set the stage for sustained volatility and a high-risk premium on oil prices. Historically, direct attacks on infrastructure cause dramatic price reactions. We saw this in 2019 when attacks on Saudi Arabia’s Abqaiq and Khurais facilities briefly knocked out 5% of global supply, causing one of the largest single-day price surges in history. The precedent from 2025 suggests an even higher risk is now priced into the market, and any further escalation could trigger a similar, if not larger, price spike. This tension is happening within an already tight market. The International Energy Agency (IEA) recently projected that global oil demand is on track to hit a record high of over 103 million barrels per day this year. With non-OPEC+ supply growth slowing, there is very little spare capacity to absorb a major supply disruption from the Middle East. Given this backdrop, we view the current price weakness as a strategic opportunity to position for a sharp move higher in the coming weeks. The fundamental risk is skewed to the upside, driven by the unresolved conflict in one of the world’s most critical energy-producing regions. For derivative traders, this means considering the purchase of call options or setting up bull call spreads to profit from a potential price surge. The extreme uncertainty also makes long volatility strategies, like buying straddles, an attractive way to trade the potential for a major price move. The current dip seems to be a brief pause before the geopolitical reality reasserts itself on the market.

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