- WTI rebounds as UAE pushes military action to reopen Strait of Hormuz.
- Emirati officials seek UN Security Council approval for a multinational military mission to restore Strait navigation.
- Trump said that the US would leave the Iran war soon, with withdrawal possible within two to three weeks.
West Texas Intermediate (WTI) oil price edges higher after registering over 4% losses in the previous day, trading around $98.60 per barrel during the Asian hours on Wednesday. Crude oil prices rebound as the United Arab Emirates (UAE) pushes for military action to reopen the Strait of Hormuz, signaling a major strategic shift and elevating risks of broader regional escalation, while Iran warns of further retaliation.
According to a Wall Street Journal report, Emirati officials are lobbying for a United Nations Security Council (UNSC) resolution to authorize a multinational mission to restore navigation in the strait, potentially involving the use of force. The UAE is also urging the United States (US) and allied nations across Europe and Asia to form a coalition to clear mines, escort commercial vessels, and, if required, secure strategic positions along the waterway.
Oil prices faced downside pressure amid growing expectations of Middle East de-escalation following remarks from US President Donald Trump. Trump indicated that US operations could conclude before the Strait of Hormuz fully reopens, aiming to avoid prolonging the conflict.
Iran’s president also signaled openness to ending hostilities under specific guarantees. However, uncertainty persists due to Iran’s historically firm stance and continued US military presence, which could heighten the risk of renewed escalation.
Meanwhile, a Reuters survey showed the OPEC (Organization of the Petroleum Exporting Countries) oil output dropped sharply in March to its lowest level since June 2020, during the peak of the COVID-19 pandemic, largely due to supply disruptions linked to the Strait of Hormuz. Production fell by 7.3 million barrels per day (bpd) month-over-month to 21.57 million barrels per day.
The American Petroleum Institute (API) reported that Weekly Crude Oil Stock surged by 10.263 million barrels in the week ending March 27, marking the largest build in weeks. This increase followed a prior rise of 2.3 million barrels and ran counter to expectations for a 1.3 million-barrel draw.
