WTI climbs above $72.00 on rising geopolitical tensions in the Middle East

West Texas Intermediate (WTI), the benchmark for U.S. crude, traded at $72.05 during Asian trading hours on Friday. Market concerns about escalating geopolitical tensions in the region have intensified as WTI prices climbed to their highest levels since February due to Israeli airstrikes on Iranian targets.

Later on Thursday, Israeli Defense Minister Israel Katz said he had carried out a “preemptive strike” against Iran and declared a state of emergency in preparation for retaliation. Israeli Prime Minister Benjamin Netanyahu said earlier Friday that Israel struck the heart of Iran’s nuclear enrichment and nuclear weaponization programs. Netanyahu also targeted Iran’s main concentration facility in Natanz, adding that the operation would continue until it was completed.

A new round of confrontation in the Middle East, where a third of global crude oil production comes from, has increased concerns about geopolitical risks, driving up WTI prices. “We are back in an environment of heightened geopolitical uncertainty, which has left the oil market in a state of tension and required it to start pricing in a higher risk premium for any potential supply disruption,” said Warren Patterson, head of commodity strategy at ING Groep NV.

On the other hand, US President Donald Trump’s latest tariff threat could put pressure on WTI prices. Trump said the trade deal with China was "completed," but lacked details and confirmation from China. In addition, Trump said he intends to send letters to dozens of U.S. trading partners over the next 1 to 2 weeks to set unilateral tariffs ahead of the July 9 deadline, which has been accompanied by his 90-day moratorium.

Oil traders will keep a close eye on the progress of U.S.-China trade talks. Economic uncertainty caused by Trump’s tariff policy could be a drag on WTI prices. Later Friday, the University of Michigan Consumer Confidence Index will take center stage.