Brent crude rallies as Iran eyes Hormuz deal with Oman

The global benchmark Brent crude extended its rally on Tuesday after reaching its highest level since July 24. Iran's threat to retaliate against any new US aggression on its assets has injected risk into the market, signaling prolonged conflict in West Asia.

Brent crude futures rose 0.35% or by 34 cents to trade around $97.34 a barrel during early trade, while U.S. West Texas Intermediate crude climbed 1.26% or by $1.15 to trade around $92.63 a barrel, according to Reuters.

Analysts say the recent escalation of the Middle East conflict has increased the likelihood of a prolonged standoff, punctuated by calibrated military action by the US and Iran. This could see Persian Gulf supply remain constrained through the rest of 2026, with ANZ analyst Daniel Hynes predicting 'a full return to pre-war throughput until late Q1 or early Q2 2027.'

In related news, financial services platform Marex released its September commodity outlook, with analyst Ed Meir saying crude oil prices will likely remain elevated through year-end as long as the war continues.