Brent crude climbs beyond $97 as Hormuz disruptions choke global oil supplies
With the ongoing conflict in the Middle East escalating, oil prices are experiencing a significant uptick as global supplies come under threat. Iran has issued warnings of retaliation against US actions, heightening fears surrounding energy infrastructure. As tensions rise in the Strait of Hormuz, traders are incorporating a risk premium into oil costs.
Oil prices surged past $97 per barrel on Tuesday as ongoing conflict in the Middle East continues to disrupt global crude supplies. Brent crude increased by $0.05 to $97.05, while WTI crude climbed $0.94 to $92.42. The latest gains followed Iran's warning that it would retaliate against any future US attacks on its assets, intensifying fears of a prolonged conflict threatening energy infrastructure and shipping in the Gulf.
The Strait of Hormuz, a critical route for global crude shipments, remains a focal point for traders concerned about the risks. Iran's warning on Monday highlighted the vulnerability of energy infrastructure across the Gulf, including US oil and gas interests. Tensions escalated following a weekend of tit-for-tat strikes, with no indication of a diplomatic breakthrough.
In response to the escalating situation, Goldman Sachs revised its oil-price outlook, raising its Brent and WTI forecasts to $85 and $80, respectively, for December 2026. The bank assumed that disruptions to Middle East shipping would continue into 2027. Analyst Ed Meir from Marex predicted that crude prices would remain elevated through the end of the year, given the ongoing war and unresolved issues.
US President Donald Trump claimed that oil prices would plummet once the US achieves victory in the conflict with Iran, predicting gas prices could fall below $2 per gallon. Trump linked high energy costs to the military operations in the Middle East and reiterated his stance against Iran acquiring a nuclear weapon, vowing it would never happen.
Meanwhile, Iranian officials warned of severe consequences for any US misadventures against Iranian energy facilities, emphasizing Iran's extensive energy production chain and the exposed nature of American energy interests in the region.
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