WTI falls to near $69.00 amid rising oil supply odds from Middle East

West Texas Intermediate (WTI) oil price loses ground for the fourth consecutive day, trading around $69.20 per barrel during European hours on Thursday. Crude oil prices are facing strong headwinds as market expectations point to a significant surge in supply from the Middle East.

Speaking at the Reuters Global Energy Forum in New York, US Energy Secretary Chris Wright highlighted this shift by noting that roughly 20 million barrels of oil recently exited the Strait within a single 24-hour window, characterizing the heavy shipments as a return to normal operational flows. Shipping data closely tracks this recovery, showing that an interim deal on Wednesday cleared the way for three previously stranded tankers carrying 5 million barrels of crude to finally exit the Gulf. Market supply is expected to expand even further due to a temporary US waiver that allows buyers to purchase already-loaded Iranian oil.

Compounding these supply pressures are growing geopolitical tensions and structural friction within OPEC itself. A senior Iraqi oil ministry official stated that Iraq will have to consider all options if its production quota is not significantly increased. The looming prospect of Iraq considering an exit from the cartel introduces further stability concerns, especially following the high-profile, surprise departure of the United Arab Emirates (UAE) from OPEC earlier this year.

This combination of rising Middle Eastern output and Iran’s boost in sales from the temporary reprieve on US sanctions has already driven down the prices of physical crude oil cargoes globally. However, the long-term outlook remains debated among analysts. Goldman Sachs recently noted that it does not expect a massive, sustained pick-up in Iranian production, even if the US sanctions relief manages to extend beyond its scheduled August 21 expiry date, per Reuters.