West Asia Tensions Push Oil Prices Higher on Supply Disruption Fears

Oil prices surged on Tuesday as tensions in West Asia escalated, prompting concerns over supply disruptions. Brent crude futures rose by 34 cents or 0.35% to $97.34 a barrel, while US West Texas Intermediate crude increased by $1.15 or 1.26% to $92.63 a barrel.

The heightened risks of a prolonged conflict in the region were triggered by Iran's warning that energy infrastructure across the Gulf is vulnerable to retaliation, including US oil and gas interests.

This followed tit-for-tat strikes during the weekend between the US and Iran, with no sign of progress towards a diplomatic breakthrough. Analyst Daniel Hynes at ANZ noted that 'the recent escalation has increased the likelihood of a prolonged standoff.'

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