WTI Crude Oil slides below 95 as Iran risk premium cools

WTI crude slid over 3% on Monday, opening near 100.00 before selling off through the session to settle below 95.00 per barrel. The day's bearish candle, which opened at its high and closed in the lower half of its range, reflects a cooling of the panic-buying impulse that drove the spike to above 113.00 last week. Since that spike high, price has pulled back in a series of lower daily closes, though the broader trend remains sharply elevated relative to where crude was trading before the Strait of Hormuz closure.

The Strait of Hormuz closure, triggered by the US-Israeli military operation against Iran, removed an estimated 20% of global seaborne oil supply from the market almost overnight, driving the near-vertical rally from the mid-February breakout near 65.00.

With no clear timeline for the reopening of the strait and tanker re-routing adding days to delivery schedules, the supply shock remains the dominant fundamental driver. Reports that the White House is considering a coordinated release from the Strategic Petroleum Reserve (SPR) have provided some downward pressure at the margin, though traders appear skeptical it would meaningfully offset the disruption.

On the demand side, elevated prices are beginning to raise demand destruction concerns, particularly from Asian importers. China's National Development and Reform Commission flagged plans to draw down state reserves rather than purchase at spot, while India has accelerated talks with alternative Middle Eastern producers outside the strait corridor. These dynamics are adding a ceiling to the rally even as the underlying supply shock persists.

WTI daily chart