Oil Prices Soar as Escalating Tensions in Middle East Drive Up Forecasts

Crude oil prices rose for the third consecutive session on August 8, reaching near six-week highs as tensions between the US and Iran continued to escalate in the Middle East.

The latest round of retaliatory strikes has led market participants to believe that a prolonged conflict will squeeze oil supply, prompting Goldman Sachs to raise its crude price forecasts for December 2026 and 2027.

Brent crude futures rose by 0.35% in Asian trading on August 8 to $97.34 per barrel, while US WTI crude futures gained 1.26% to $92.63. Goldman Sachs warned that Brent crude could climb to $120 per barrel if attacks on vessels escalate.

The bank's revised price forecasts reflect a new assumption that Middle East shipping disruptions will persist through 2027. Under its base-case scenario, the supply deficit is assumed to be limited to 500,000 barrels per day, while under an upside scenario where vessel attacks increase, oil prices could rise to $120.