WTI has resumed its upward movement in early June following a sharp correction in May. Prices have recovered to around $91 per barrel amid renewed strikes between the US and Iran and ongoing uncertainty surrounding the Strait of Hormuz.
The market is once again pricing in a geopolitical premium, as investors fear that any disruption to supplies through this key oil transit route could quickly tighten global supply. At the same time, recent price action shows that the market remains highly sensitive to any news about negotiations and potential de-escalation.
Recovery supported by inventory drawdowns and expectations of flow normalization
Additional support for WTI comes from gradually improving expectations for global demand after May’s sell-off. According to the EIA and IEA, the market has already passed the most acute phase of panic over potential supply shortages, and traders are beginning to price in a scenario of partial recovery in flows through the Strait of Hormuz in the second half of the year. Meanwhile, global oil inventories remain significantly below comfortable levels after a prolonged period of disruptions, providing fundamental support for prices even amid continued high volatility.
OPEC+ prevents deeper declines
Another factor behind the recovery is OPEC+ policy, which continues to balance the market through production control. Despite the gradual return of some volumes, the alliance is not allowing aggressive supply growth for now. This helps keep WTI well above levels seen at the beginning of the year and limits the scale of corrections after each round of diplomatic news related to Iran. At the same time, the market is closely watching the US shale sector, as rising US production remains the main long-term constraint on a new oil rally.
Upside persists, but risks remain high
The current market structure appears moderately bullish. After nearly a 20% drop in May, investors have started returning to oil positions, betting on further recovery driven by declining inventories and ongoing tensions in the Middle East. However, the sustainability of this growth directly depends on developments in US–Iran negotiations: any progress toward an agreement could quickly reintroduce downside pressure, while new supply disruptions could push WTI back toward the $95 level. At present, the market is effectively trading between a scenario of recovering global flows and the risk of a new energy shock.
Near-term outlook
As a result of the recovery, WTI is testing resistance around $91, where selling pressure may still emerge if the US–Iran truce holds. A breakout above this level would open the way toward $92.5. As previously noted in WTI declines as risk premium fades, news from the Middle East will continue to play a key role in driving the oil market.
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