Oil Price Today (September 14): Crude oil jumps 3% to near $108/barrel as Middle East tensions escalate. What are analysts warning?

On September 14, crude oil prices surged 3%, reaching $108 per barrel, as heightened tensions in the Middle East prompted fears of disrupted global energy supplies. The conflict intensified with Saudi Arabia and Iran attacking ships in the Gulf, leading to the closure of a crucial Saudi oil pipeline. Saudi state media released footage showing damage in Jazan province, while Iran claimed to have struck a Saudi military base in a neighboring area.

Iranian forces also attacked an Iranian cargo vessel in the Strait of Hormuz, leading to a postponement of their plan to brief neighboring countries on managing shipping. No immediate response was reported from the US military, which had previously targeted Iranian-flagged vessels under its blockade of Iranian ports.

Despite President Masoud Pezeshkian of Iran asserting that his government would not be bullied into submission, US President Donald Trump suggested Iran sought a deal and was constantly calling for one. The sharp rise in oil prices was primarily attributed to the escalating tensions and supply risks stemming from the Saudi pipeline shutdown, which could potentially affect up to 4% of global oil supply.

Analysts warned that unless negotiations in Oman resulted in operational solutions or the East-West pipeline was rapidly restored, oil prices might continue their upward trend, potentially reaching $120 per barrel. Goldman Sachs projected that oil prices could soar to $120 a barrel if attacks on Middle Eastern vessels escalated further.

Goldman's Daan Struyven noted that shipping disruptions could worsen, posing a significant threat to oil prices. Additionally, JPMorgan estimated that each month of disruption could add $7 to $8 to Brent prices, potentially driving Brent crude prices to $114 a barrel if the disruption lasted three months.