WTI rises above $69.00 as Iran strikes commercial vessels in Hormuz

• WTI gains ground following renewed geopolitical tensions in the Strait of Hormuz.
• Iran fired at least two missiles at commercial vessels transiting the strategic waterway on Monday.
• Saudi Aramco cut its Arab Light crude price for Asian buyers by $11 to a $1.50 regional benchmark discount.

West Texas Intermediate (WTI) oil price gains ground after registering modest losses in the previous day, trading around $69.20 per barrel during the Asian hours on Tuesday. Crude oil prices receive a temporary boost following renewed geopolitical tensions in the Strait of Hormuz.

According to a Bloomberg report citing a United States (US) official, Iran fired at least two missiles at commercial vessels transiting the strategic waterway late Monday. While two ships sustained significant damage, no casualties were reported. Separately, the UK Maritime Trade Operations (UKMTO) confirmed that a southbound tanker was struck on its port side by an unknown projectile, which ignited a fire on board.

Despite these security risks, West Texas Intermediate (WTI) price remained anchored near a four-month low, weighed down by indications of expanding global supply. Defusing some of the immediate supply anxiety, vessel traffic through the Strait of Hormuz has already begun to recover. Recent data showed at least eight Japan-linked vessels, including five supertankers capable of carrying two million barrels of crude each, successfully exited the waterway via a route near Iran.

Compounding the bearish market outlook, Saudi Aramco aggressively cut the price of its flagship Arab Light crude for Asian buyers by $11 a barrel, placing it at a $1.50 discount against the regional benchmark. This drastic pricing maneuver reflects increasingly soft market conditions, marking a strategy Saudi Arabia has only deployed twice before during the oil price wars of 2015 and 2020. This steep discount followed a weekend OPEC+ agreement to raise production quotas for next month, reinforcing expectations of a heavily supplied global market.