Can an OTM Option Ever Have a Higher Time Value than an ITM Option?

Yes, an OTM option can have a higher time value than a deep ITM option. Deep ITM options have most of their premium composed of intrinsic value, leaving a small time value.

A near-the-money OTM option, however, has a high probability of moving ITM and thus a large time value component. Since the OTM premium is entirely time value, it can easily exceed the small time value of a deep ITM option.