Oil Prices Climb Toward $100 as Middle East Peace Hopes Fade

Oil prices surged towards $100 per barrel as expectations of Middle East peace diminished, fueled by escalating tensions between the United States and Iran. The international benchmark Brent crude reached $97.66 per barrel, while West Texas Intermediate stood at $93.05 per barrel. This increase in prices was driven by Iran's threat of "economic warfare" and the firing of a new advanced missile at U.S. warships.

The attack on Saudi Arabia's Jizan refinery, which can process 400,000 barrels of crude daily, also contributed to the rising prices.

Furthermore, Iran announced plans to establish a new shipping corridor in the Strait of Hormuz, indicating that tanker traffic in the waterway would become more complex. Iran's Secretary of Supreme National Security Council, Mohsen Rezaei, warned the U.S. that economic warfare would be countered by a maritime exclusion zone stretching to the blockade perimeter, fundamentally altering the operational posture towards U.S. warships and bases.

These warnings follow a series of missile strikes on ships in the Persian Gulf, reinforcing the notion that the conflict is far from concluding. Analysts are already predicting that the crisis could persist until late Q1 or early Q2 2027, leading to a revision of oil price forecasts. ING analysts noted that speculators have increased their net long positions in Brent crude due to the diminishing chances of peace.