Middle East Conflict Sends Oil Prices Soaring Amid Supply Concerns
Oil prices surged on Tuesday as tensions in the Middle East escalated, with Brent crude rising to its highest level since July 24. The increase was due to heightened worries over supply disruption, particularly after Iran warned that energy infrastructure across the Gulf, including US oil and gas interests, was vulnerable.
Brent crude futures climbed 34 cents, or 0.35%, to $97.34 a barrel by 0000 GMT, while U.S. West Texas Intermediate crude was at $92.63 a barrel, up $1.15, or 1.26%. Analysts attributed the rise to the risk premium factored into prices amid heightened tensions around the Strait of Hormuz, a key artery for global crude shipments.
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. The firm warned that in a severe disruption scenario, Brent could potentially spike to $120.
Market analysts expect oil prices to remain elevated through year-end as long as the conflict continues. According to Daniel Hynes of ANZ, Persian Gulf supply constraints may persist through the rest of 2026 and until late Q1 or early Q2 2027.