WTI drifts higher above $95.50 on US-Iran tensions, Strait of Hormuz disruption fears

• WTI price gains ground to near $95.70 in Tuesday’s early Asian session. 
• Escalating US-Iran tensions and Strait of Hormuz disruptions lift the WTI price. 
• Trump is scheduled to arrive in Beijing later this week. 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $95.70 during the early Asian trading hours on Tuesday. The WTI price edges higher amid renewed geopolitical tensions in the Middle East. 

CNN reported on Monday that US President Donald Trump has grown increasingly frustrated with how the Iranians are handling talks to end the conflict, and some Trump aides say that he is now more seriously considering a resumption of major combat operations than he has in recent weeks. 

Meanwhile, Iranian Parliament speaker Mohammad Bagher Ghalibaf warned that Iran’s military was fully prepared to retaliate against any future attacks. These developments came as Trump rejected Tehran’s latest peace offer over the weekend, which he called “simply unacceptable.” Fears of a prolonged closure of the Strait of Hormuz, a critical shipping route for global energy supplies, could boost the WTI price in the near term. 

Trump and Chinese President Xi Jinping are set to meet on Thursday and Friday. It will be Trump’s first trip to China since 2017. The leaders of ‌the world’s two largest economies will hold their first face-to-face talks in more than six months as they try to stabilize ties strained by trade, the US and Israeli war with Iran, and other areas of disagreement.

Traders await the release of the American Petroleum Institute (API) report, which will be published later on Tuesday. A larger-than-expected crude oil inventory draw indicates stronger demand and could lift the WTI price, while a bigger build than estimated signals weaker demand or excess supply, which might weigh on the WTI price.