Oil rises as risks of prolonged Mideast conflict fan supply worries

Oil prices pushed further up to reach multi-week peaks on Tuesday, according to Business Recorder, as the chance of a drawn-out Middle East conflict grew. Benchmark Brent gained $1.25 to $98.25 per barrel by 0630 GMT, a rise of 1.3 per cent, while US West Texas Intermediate advanced 2.4 per cent to $93.70. The move followed Iran's warning that it would respond to any fresh US attacks on its assets.

Brent peaked at $98.79 a barrel, its strongest level since July 24, and WTI touched $94.21, the highest since June 8. Analysts at DBS Bank said the latest flare-up between Washington and Tehran could alter how markets price oil risks through 2026 and into 2027. Houthi strikes on several Saudi cities wounded 73 people and halted some energy facilities, while shipping through the Strait of Hormuz slowed early this week.

Goldman Sachs lifted its December 2026 Brent and WTI projections to $85 and $80, and its 2027 estimates to $80 and $75, after assuming Middle East shipping disruption persists into 2027. ANZ analyst Daniel Hynes expects Persian Gulf supply to stay constrained for the remainder of 2026, with full pre-war volumes not expected before late Q1 or early Q2 2027.