Oil rises as risks of prolonged Mideast conflict fan supply worries

Oil prices rose again on Tuesday as the chance of a lengthy Middle East conflict sharpened fears of supply disruption. Iran has vowed a response if Washington launches more strikes against its assets, adding to the tension. The Express Tribune reported that Brent contracts gained 49 cents to $97.49 a barrel, a rise of 0.5 per cent.

WTI, which lagged Brent because of the Monday public holiday in the United States, rose to $92.92 a barrel, adding $1.44. DBS Bank's energy research head, Suvro Sarkar, said the latest escalation could change how markets judge oil risks well into 2027. ANZ analyst Daniel Hynes added that the standoff may keep Gulf supply constrained through 2026, and that a full recovery in throughput is not foreseen before late Q1 or early Q2 2027.

US forces struck three Iranian tankers on Saturday, one of them near Kharg Island, Iran's principal export terminal, according to US Central Command. Iran said it had fired an advanced missile at American warships and threatened economic warfare, while shipping in the Strait of Hormuz slowed early this week. Goldman Sachs now sees Brent at $85 and WTI at $80 for December 2026 after raising both by $5, with $80 and $75 for 2027. Marex analyst Ed Meir expects elevated crude prices to persist until year-end if fighting goes on.