WTI recovers from a two-week trough, attracting strong buying interest around the mid-$81.00s as concerns over Iran-related risks support prices.

• WTI crude draws strong buying interest following Iran’s ballistic missile strikes on US military personnel.
• President Trump cautioned that military action could resume should talks with Iran fail to produce an agreement.
• Ongoing concerns over potential supply disruptions continue to underpin crude oil prices and provide additional upside support.

WTI rebounds sharply on renewed Middle East tensions, climbing nearly 4% on Wednesday after hitting a more than two-week low in the previous session. The US benchmark crude oil price trades around the mid-$81.00s during Asian trading, snapping a three-day losing streak as fears grow over a potential resurgence of US-Iran hostilities.

The latest escalation came after Iran’s Islamic Revolutionary Guard Corps (IRGC) launched multiple ballistic missiles at US military forces across the Middle East on Tuesday. At the same time, US President Donald Trump renewed his warning that military action could resume if diplomatic efforts with Tehran fail. In an interview with Fox News, Trump stated that the US could strike critical Iranian infrastructure, including major bridges and power facilities, should negotiations break down.

Further fueling concerns, US Central Command reported that American and Saudi forces carried out coordinated strikes against Iran-backed militants in Iraq. The renewed escalation, coupled with ongoing tensions over the Strait of Hormuz, has prompted traders to factor a geopolitical risk premium into oil markets, helping drive crude prices higher. Shipping activity through the crucial waterway has already declined significantly after Iran attacked several vessels earlier this month.

Additional support for oil prices comes from the Iran-backed Houthi movement, which recently announced a naval blockade targeting Saudi Arabia in the Red Sea, opening a new front in the months-long conflict. The move has intensified fears of disruptions to global energy supplies. Meanwhile, a weaker US Dollar is providing an extra tailwind for dollar-denominated commodities, reinforcing the bullish tone ahead of the Federal Reserve’s policy announcement.