Oil prices continued to rise on Tuesday as the risk of a prolonged conflict in the Middle East increased after Iran threatened to retaliate against any new US attacks targeting its assets, raising concerns over potential supply disruptions.
Brent crude futures rose 34 cents, or 0.35%, to $97.34 a barrel by 0000 GMT. US West Texas Intermediate (WTI) crude stood at $92.63 a barrel, up $1.15, or 1.26%.
Brent crude reached its highest level since July 24 in the previous session as traders continued to price in a risk premium amid rising tensions around the Strait of Hormuz, a key waterway for global crude oil shipments.
Iran warned on Monday that energy infrastructure across the Gulf region was at risk, including US interests linked to oil and gas. The warning came after a series of retaliatory strikes earlier in the week, with no signs of progress toward a diplomatic breakthrough.
The US Central Command said its forces targeted three Iranian oil tankers on Saturday, including one off Kharg Island, Iran’s main oil export hub, following attacks by Iran’s Islamic Revolutionary Guard Corps on US warships in the region.
Daniel Hynes, an analyst at ANZ, said in a note that the latest escalation in the Middle East conflict had increased the likelihood of a prolonged confrontation involving measured military actions by the United States and Iran.
“This could result in continued restrictions on supplies from the Gulf throughout the remainder of 2026,” he said.
Hynes added that a full return to pre-war production levels was not expected until late in the first quarter or early in the second quarter of 2027.
Market Outlook
Meanwhile, Goldman Sachs raised its forecasts for Brent and US WTI crude by $5 a barrel, putting them at $85 and $80 a barrel, respectively, for December 2026, and at $80 and $75 a barrel, respectively, for 2027. The revisions reflect expectations that shipping disruptions in the Middle East will persist into next year.
In its September commodities outlook, financial services platform Marex analyst Ed Meir said that as long as the war continues — which he expects given “the many issues that remain unresolved” — crude oil prices are likely to remain elevated through the end of the year.
Source: Reuters
