Oil rises as risks of prolonged Mideast conflict heighten supply worries

Oil prices rose further on Tuesday, with Brent crude futures up 34 cents, or 0.35%, to $97.34 a barrel by 0000 GMT, according to Business Recorder. West Texas Intermediate stood at $92.63 a barrel after gaining $1.15, or 1.26%. The rally followed Iran's warning that it would respond to any fresh US attacks on its assets, which heightened fears of supply disruption.

Brent had reached a level not seen since July 24 in the previous session, as traders priced more risk into the market amid tensions around the Strait of Hormuz, a major channel for world crude shipments. Iran warned on Monday that Gulf energy assets, including those tied to American oil and gas firms, were exposed. The weekend exchange of strikes has left no visible sign of progress toward a diplomatic deal.

ANZ analyst Daniel Hynes expects Persian Gulf supply to stay limited for the remainder of 2026, with pre-war throughput not returning until late Q1 or early Q2 2027. Goldman Sachs raised its December 2026 forecasts to $85 for Brent and $80 for WTI, and set 2027 forecasts at $80 and $75, assuming Middle East shipping disruption continues into 2027. Marex analyst Ed Meir said crude prices will likely stay elevated through year-end.