West Texas Intermediate (WTI) crude oil is trading around $66.25 in early Asian market hours on Wednesday, recovering some losses as the US Dollar weakens and geopolitical tensions in the Middle East intensify.
The decline in the US Dollar Index (DXY), which dropped to multi-month lows near 103.20, has made oil more affordable for foreign buyers, providing upward pressure on WTI prices.
Geopolitical concerns are also influencing the market. A Houthi spokesman announced on Tuesday that Israeli ships violating the group’s ban on certain Middle Eastern waterways would be targeted immediately. Meanwhile, former US President Donald Trump is ramping up efforts to curb Iranian oil exports in a bid to pressure Tehran over its nuclear program. In response, Iran’s Supreme Leader Ayatollah Ali Khamenei reaffirmed on Saturday that Iran would not bow to external pressure. These developments could lend further support to crude prices.
On the supply side, US crude inventories surged last week. The American Petroleum Institute (API) reported an increase of 4.247 million barrels for the week ending February 28, far exceeding the market’s expectation of a 2.1 million-barrel rise. This follows a previous week’s drawdown of 1.455 million barrels.
Additionally, uncertainty surrounding Trump’s tariff policies may weigh on oil prices. While Trump reversed his decision to double tariffs on Canadian steel and aluminum, his administration confirmed that a fresh 25% tariff on all imported steel and aluminum—including from Canada and Mexico—will take effect on Wednesday, raising concerns over potential economic slowdowns.
