Oil Prices Soar as Investors Worry About Escalating Conflict

Energy prices are expected to remain high well into next year, according to investors. The latest Brent crude futures contracts for April 2027 jumped to over $85 a barrel this week, surpassing levels seen during the peak oil price in early May.

The increase is attributed to recent drone attacks on an alternative crude oil export route and a key pipeline, which will be out of service for weeks. This has led to a broader adjustment in market expectations, with traders now considering the possibility of further attacks on other diversionary export points.

According to Joe DeLaura, senior energy strategist at Rabobank, 'You can see how the curve is actually shifting upward, as we see more escalation.' He warns that if probabilities of attacks on these pipelines rise from 2% to 10%, crude prices will need to be priced aggressively.