WTI crude rises to three-week high near $86 amid US-Iran deadlock

West Texas Intermediate (WTI) crude oil extended its rally to a three-week high near $86 per barrel on [date] as the diplomatic deadlock between the United States and Iran kept supply concerns elevated. Brent crude, the international benchmark, climbed above $90 per barrel this week. Traders are adding a geopolitical risk premium because failed negotiations over Tehran’s nuclear program and related sanctions could lead to military confrontation or tighter enforcement, potentially removing barrels from an already tight market. OPEC+ production cuts, slower-to-respond US shale output and resilient global demand, particularly in Asia, are also supporting prices. The Strait of Hormuz, a major oil-shipping route through which about 20% of global oil consumption passes, remains central to the risk. Further US sanctions targeting Chinese purchases of Iranian crude could remove an estimated 500,000 to 1 million barrels per day, according to industry analysts. Higher oil prices are raising gasoline and heating costs, complicating central banks’ inflation fight and increasing pressure on energy-importing economies. WTI could test $100 per barrel if tensions escalate and the strait is threatened, while a diplomatic breakthrough could quickly unwind the geopolitical premium; without a major supply shock, prices may consolidate near current levels.

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