WTI Dips Below $91.00 Despite US-Iran Tensions Escalating

WTI crude oil futures retreated during Thursday's Asian session after a modest overnight gain, trading near $91.66 per barrel. At the time of writing, prices briefly lost the $91 handle, touching an intraday low of $90.80 per barrel. The market is closely monitoring progress in US-Iran diplomatic talks, with uncertainty providing underlying support for prices.

**Unclear US-Iran Talks Outlook Limits Downside for Oil**

Despite downward pressure on prices, conflicting signals regarding the progress of US-Iran negotiations have limited further declines. Earlier, the market had sold off on bets that US-Iran peace talks were advancing, causing oil prices to slump for a second consecutive day on Friday. However, the latest diplomatic developments indicate the situation remains fluid. Pakistan and Iran recently held comprehensive discussions on preventing escalation and reopening the Strait of Hormuz, underscoring the persistence of regional tensions. This geopolitical uncertainty renders any optimism over easing supply disruption risks fragile.

**Plunge in Strait of Hormuz Transits Keeps Supply Concerns Alive**

Shipping data reveals potential supply risks. According to ship-tracking firm Kpler, the number of commercial vessels transiting the Strait of Hormuz has dropped sharply recently, with only two ships passing on the 24th, far below the daily average of 14 over the past 10 days. Disruptions at this critical waterway continue to remind the market of the real threat to global oil supplies. Although an energy major executive noted that more producers are attempting to ship cargoes through the strait, the extremely low transit numbers suggest normalization will take time.

**Institutions Raise Price Forecasts, Reflecting Tight Supply-Demand Dynamics**

Major investment banks are turning more optimistic on the oil price outlook. Morgan Stanley analysts significantly raised their Brent crude price forecasts in a latest report, citing slower-than-expected supply recovery in the Middle East and a prolonged supply-demand gap. The firm now expects Brent to average around $90 per barrel in Q3 2026, surging to a peak near $100 per barrel in Q4. This forecast adjustment reflects market consensus on the current geopolitical risk premium and tightening fundamentals.