Iran's Threat Raises Oil Prices as Middle East Tensions Escalate

Oil prices surged on Tuesday as tensions in the Middle East escalated after Iran threatened to retaliate against any new US attacks, raising concerns about supply disruptions.

The Brent crude futures price climbed 49 cents, or 0.5%, to $97.49 a barrel by 0400 GMT, while US West Texas Intermediate crude was at $92.92 a barrel, up $1.44, or 1.6%.

Analysts believe that the recent hostilities between the US and Iran have increased the likelihood of a prolonged standoff, which could keep Persian Gulf supply constrained through 2026.

Daniel Hynes, an analyst at ANZ, said that '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.'

Goldman Sachs raised its Brent and WTI price forecasts, reflecting its new assumption that Middle East shipping disruptions will continue into 2027.