WTI rises as supply disruption fears return to Oil markets

West Texas Intermediate (WTI) trims part of its earlier gains on Wednesday but remains supported as supply risks resurface amid escalating tensions in the Middle East.

At the time of writing, WTI trades around $73.60, up 2.20% on the day after climbing to an intraday high of $75.73, its highest level in two weeks.

Shipping through the Strait of Hormuz had been gradually normalizing after last month's interim peace agreement between the United States and Iran. However, the latest flare-up has reversed that optimism, bringing the geopolitical risk premium back into Oil markets.

Iran's Press TV, citing an informed source, reported that Tehran would close the Strait of Hormuz in the event of any fresh attacks.

The warning followed renewed fighting between the United States and Iran overnight after the Islamic Revolutionary Guard Corps (IRGC) attacked commercial vessels transiting the strategic waterway earlier this week.

Earlier on Wednesday, US President Donald Trump declared that the ceasefire deal with Iran was “over” during the NATO Summit in Ankara, Turkey. However, Reuters later reported that Trump did not repeat those remarks, citing a source familiar with the talks.

Meanwhile, the US Energy Information Administration (EIA) reported that US commercial crude Oil inventories increased by 2.998 million barrels in the week ended July 3, against market expectations for a 1.9 million-barrel draw. The build ended a ten-week streak of declining crude stockpiles.