WTI reaches its highest level since late October amid increased risk premium driven by unrest in Iran

WTI Crude Oil Surges Amid Heightened Tensions in Iran

West Texas Intermediate (WTI) crude oil continued its upward momentum on Wednesday, marking a fifth consecutive day of gains. The rally comes as growing unrest in Iran injects renewed geopolitical uncertainty into the market. As of now, WTI is trading near $61.50 per barrel, reaching its highest point since late October and climbing almost 5% this week.

Investors remain cautious as widespread protests across Iran raise concerns about potential disruptions to oil supplies. These events have also rekindled worries about possible US intervention and the threat of broader instability throughout the region.

Tensions escalated further after US President Donald Trump, posting on Truth Social, urged Iranian citizens to continue their demonstrations and promised support, stating, “Iranian Patriots, KEEP PROTESTING — TAKE OVER YOUR INSTITUTIONS!!!… HELP IS ON ITS WAY.” He also announced the suspension of all meetings with Iranian officials until the violence subsides. Trump has previously suggested that military action could be considered if Iran persists with its crackdown.

Market participants are keeping a close eye on any new developments between Iran and the United States. Meanwhile, the latest data from the US Energy Information Administration (EIA) failed to dampen the bullish sentiment, even though it revealed an unexpected increase of 3.391 million barrels in crude inventories. This contrasts with forecasts for a 2.2 million-barrel decrease and follows a 3.831 million-barrel drop the previous week.

On the outlook front, the EIA’s most recent Short-Term Energy Outlook released Tuesday suggests a less optimistic medium-term scenario for oil prices. The agency anticipates that global oil prices will decline in 2026 as production outpaces demand, leading to a buildup in worldwide inventories. The EIA projects that these inventories will continue to grow into 2027, though at a more moderate rate.

According to the EIA, Brent crude is expected to average $56 per barrel in 2026, representing a decrease of about 19% from 2025 levels, and is forecast to fall further to an average of $54 per barrel in 2027.