WTI climbs above $69.00 after Iran targets commercial shipping in the Strait of Hormuz

WTI crude extends its advance as renewed geopolitical tensions in the Strait of Hormuz raise concerns over potential supply disruptions. Iran reportedly launched at least two missiles at commercial vessels passing through the key maritime chokepoint on Monday, bolstering risk premiums in the oil market. However, gains may be tempered after Saudi Aramco reduced the price of its Arab Light crude for Asian customers by $11, bringing it to a $1.50 discount to the regional benchmark.

West Texas Intermediate (WTI) crude oil edged higher to around $69.20 per barrel during Tuesday’s Asian session, recovering part of the previous day’s decline as renewed tensions in the Strait of Hormuz provided short-term support to prices.

Market sentiment improved after a Bloomberg report, citing a US official, indicated that Iran launched at least two missiles at commercial vessels navigating the crucial shipping corridor late Monday. Although two ships suffered significant damage, no fatalities were reported. Meanwhile, the UK Maritime Trade Operations (UKMTO) said a southbound tanker was hit by an unidentified projectile on its port side, triggering a fire onboard.

However, the upside in crude prices remained limited, with WTI hovering near a four-month low amid growing signs of ample global supply. Easing some immediate concerns over disruptions, maritime traffic through the Strait of Hormuz has begun to normalize. Data showed that at least eight Japan-linked vessels, including five supertankers capable of carrying roughly two million barrels of crude each, successfully transited the waterway via routes close to Iran.

Further weighing on the market, Saudi Aramco slashed the official selling price of its benchmark Arab Light crude for Asian customers by $11 per barrel, leaving it at a $1.50 discount to the regional benchmark. The rare and aggressive price cut—previously seen only during the oil market downturns of 2015 and 2020—underscores weakening demand conditions. The move came shortly after OPEC+ agreed over the weekend to increase production quotas for next month, reinforcing expectations of a more oversupplied global oil market and limiting the scope for sustained gains in WTI.