Oil Prices Rise Further as Iran-US Tensions Threaten Global Supplies
- Brent crude climbed to $97.34 a barrel, while US West Texas Intermediate rose to $92.63 in early Tuesday trading.
- Growing military tensions involving Iran and the United States have heightened fears of prolonged supply disruptions in the Persian Gulf.
- Analysts expect oil prices to remain elevated through the end of 2026, with shipping disruptions potentially continuing into 2027.
Oil prices extended their gains on Tuesday as escalating tensions between Iran and the United States increased the risk of a prolonged Middle East conflict and possible disruption to global energy supplies.
Brent crude futures advanced 34 cents, or 0.35%, to $97.34 a barrel by 0000 GMT. US West Texas Intermediate crude gained $1.15, or 1.26%, to trade at $92.63 a barrel.
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Brent had already reached its highest level since July 24 during the previous session. Traders continued to add a geopolitical risk premium to crude prices amid mounting concerns over the Strait of Hormuz, a strategically important route for global oil shipments.
Iran warned on Monday that energy infrastructure throughout the Gulf remained vulnerable, including American oil and gas interests in the region. The warning followed a series of retaliatory strikes over the weekend, with no indication of progress towards a diplomatic solution.
According to the US Central Command, American forces struck three Iranian oil tankers on Saturday, including one near Kharg Island, Iran’s primary oil export hub. The attacks followed strikes by Iran’s Revolutionary Guards against US warships operating in the region.
ANZ analyst Daniel Hynes said the latest escalation had increased the possibility of a prolonged confrontation involving carefully measured military action by both Iran and the United States.
He warned that oil supplies from the Persian Gulf could remain restricted throughout the remainder of 2026. ANZ does not expect shipment volumes to return fully to pre-war levels until late in the first quarter or early in the second quarter of 2027.
Goldman Sachs has raised its oil price forecasts in response to the worsening regional outlook. The bank increased its December 2026 projections by $5, placing Brent at $85 a barrel and WTI at $80.
For 2027, Goldman Sachs now expects Brent to average $80 a barrel and WTI $75. The revised forecasts are based on the assumption that disruptions to Middle East shipping routes will continue into next year.
Marex analyst Ed Meir also expects crude prices to remain elevated through the end of the year. In the financial services platform’s September commodity outlook, he said the conflict was likely to continue because several major issues remained unresolved.
