Middle East Tensions Drive Oil Prices to New Heights Amid War Fears
Oil prices have risen due to concerns over a prolonged conflict in the Middle East. On September 8, Brent crude futures rose by 0.5% to $97.49 per barrel, while U.S. West Texas Intermediate (WTI) crude increased by 1.6% to $92.92 per barrel.
Iran's statement that it is prepared to launch a retaliatory strike against any new U.S. attacks on Iranian targets has added pressure to the market. According to ANZ analyst Daniel Hynes, the recent escalation of the conflict in the Middle East has significantly increased the risk of a protracted standoff between the U.S. and Iran.
Hynes predicts that supplies to the Persian Gulf will remain limited until the end of 2026, with the market potentially not returning to pre-war levels until the first or second quarter of 2027. Goldman Sachs has raised its price forecasts for Brent and WTI by $5, expecting them to trade at $85 per barrel and $80 respectively in December 2026.
Marex analyst Ed Meir also believes that oil prices will remain high through the end of 2026 as long as the war continues. He notes that a quick return to a more stable market is unlikely due to the many unresolved issues, which could lead to further escalation in the region.