Middle East Conflict Drives Oil Prices Higher Amid Supply Worries

Oil prices continued to rise on Tuesday as concerns about a prolonged conflict in the Middle East intensified. The ongoing tensions between the US and Iran have heightened worries over supply disruptions, with Brent crude futures climbing 0.5% to $97.49 a barrel.

According to Suvro Sarkar, head of energy research at DBS Bank, 'the recent uptick in hostilities between the US and Iran has the potential to materially change markets' reading of oil price-related risks not only for the rest of 2026, but well into 2027 now.'

The conflict escalated on Saturday when US forces struck three Iranian oil tankers, including one near Kharg Island, Iran's main oil export hub. In response, Iran fired an advanced missile at US warships.

Goldman Sachs raised its Brent and WTI price forecasts by $5 to $85 and $80, respectively, for December 2026 and to $80 and $75, respectively, for 2027, reflecting its assumption that Middle East shipping disruptions continue into 2027.