Crude Oil Pulls Back from Six-Month High Amid Geopolitical and Supply Concerns

WTI Crude Oil retreated slightly on Tuesday, trading around $65.95 after hitting a six-month high of $67.23 the previous day. The modest decline reflects a market caught between persistent geopolitical tensions in the Middle East and expectations of growing global supply.


Rising political friction between Washington and Tehran continues to weigh on the market. Ongoing diplomatic talks in Geneva are paired with heightened US pressure on Iran, while naval exercises in the Strait of Hormuz—through which roughly 20 million barrels of oil transit daily—have reignited fears of potential supply disruptions.

These developments keep a geopolitical risk premium embedded in oil prices. At the same time, the outlook for supply is becoming more abundant. Global inventories are projected to increase this year as production growth outpaces demand, suggesting the market could shift toward balance or even oversupply.


Adding to the uncertainty, renewed trade tensions and potential new tariffs have sparked questions about global growth and energy consumption, tempering optimism for further price gains.


Investors are now looking ahead to the weekly crude oil stock reports, which could provide fresh insight into near-term price direction. For now, the oil market remains a delicate balancing act, weighing geopolitical risks against an increasingly well-supplied global market.