Oil Prices Near $100 Amid Fears of a Prolonged Conflict
Oil prices continued to climb on Tuesday to multi-week highs as risks grew of a prolonged conflict in the Middle East, after Iran threatened to retaliate against any new U.S. attacks targeting its assets, amplifying supply disruption fears.
Brent crude futures rose $0.46, or 0.47%, to $97.46 a barrel by 07:26 GMT. U.S. West Texas Intermediate (WTI) crude reached $92.54 a barrel, up $1.06, or 1.16%.
Brent earlier climbed as high as $98.79 a barrel, its highest level since July 24, while WTI hit $94.21 a barrel, its highest since June 8, according to Reuters.
Suvro Sarkar, energy research director at DBS Bank, said WTI was playing catch-up with Brent following the U.S. Labor Day holiday on Monday, as Brent had absorbed the impact of the weekend’s escalation.
He added, “Generally speaking, we believe the latest escalation in hostilities between the U.S. and Iran could materially alter market perceptions of oil price risks, not just for the rest of 2026, but well into 2027.”
Iran threatened the United States with an “economic war” and stated it had fired an advanced missile at U.S. warships.
An official source at the Saudi Ministry of Energy stated that several energy facilities and installations in the southern region of the Kingdom were targeted on Tuesday morning, September 8, 2026, and competent authorities have begun handling the situation and taking necessary measures.
Mutual Attacks Between the U.S. and Iran
The U.S. Central Command stated that its forces targeted three Iranian oil tankers on Saturday, including one off Kharg Island, Iran’s primary oil export hub, following attacks by the Iranian Revolutionary Guard Corps on U.S. warships in the region.
Daniel Hynes, an analyst at ANZ, noted in a memo, “The latest escalation in the Middle East conflict has increased the likelihood of a protracted confrontation marked by targeted military actions by both the U.S. and Iran. This could keep Gulf supplies constrained throughout the remainder of 2026.”
He added, “We do not expect a full return to pre-war production levels until late Q1 or early Q2 of 2027.”
Shipping traffic through the Strait of Hormuz also slowed after Iran threatened yesterday to retaliate against any new U.S. attacks.
Market Outlook
Meanwhile, Goldman Sachs raised its price forecasts for Brent and WTI crude by $5 a barrel to reach $85 and $80 per barrel, respectively, in December 2026, and to $80 and $75 per barrel, respectively, in 2027, reflecting its new assumption of continued Middle East shipping disruptions into 2027.
In Marex’s September commodities outlook, analyst Edward Meir stated that as long as the war continues—which he believes will happen due to “several unresolved issues”—crude oil prices are likely to remain elevated through the end of the year.
