Global oil prices moved closer to the psychologically important $100-per-barrel mark on Tuesday as escalating confrontation between the United States and Iran intensified fears of prolonged disruption to crude supplies from the Persian Gulf.
Brent crude futures gained 49 cents, or 0.5 per cent, to $97.49 per barrel by 0400 GMT, while US West Texas Intermediate crude climbed $1.44, or 1.6 per cent, to $92.92 per barrel.
The increase followed Iran’s warning that it could retaliate against further US attacks on its assets, raising fears that energy infrastructure and commercial shipping could become increasingly exposed to the conflict.
Strait of Hormuz at Centre of Supply Fears
The Strait of Hormuz has emerged as one of the biggest concerns for energy markets.
The narrow waterway linking the Persian Gulf with the Gulf of Oman is one of the world’s most strategically important energy routes, handling roughly one-fifth of global oil and gas shipments.
Any prolonged reduction in shipping through the strait could restrict supplies from major Gulf producers and push international energy prices higher.
Shipping activity has already slowed.
Kpler data cited by Reuters showed that only seven commodity vessels passed through Hormuz on Monday, compared with eight a day earlier, although the actual number could be higher because some vessels may have switched off their tracking transponders.
Iran has also warned that energy infrastructure across the Gulf, including American oil and gas interests, could be vulnerable if the conflict intensifies.
US Strikes Iranian Tankers
The latest escalation followed US strikes against three Iranian oil tankers on Saturday, including a vessel near Kharg Island, Iran’s principal oil-export hub.
The attacks followed strikes by Iran’s Revolutionary Guards against US warships operating in the region.
The exchanges have increased fears that what had already been a serious geopolitical confrontation could develop into a prolonged conflict affecting the physical movement of oil.
ANZ analyst Daniel Hynes said the escalation had increased the possibility of a sustained stand-off involving periodic US and Iranian military action.
ANZ expects Persian Gulf supplies could remain constrained through the remainder of 2026, with a full return to pre-war throughput potentially delayed until late in the first quarter or early in the second quarter of 2027.
Goldman Raises Oil Forecast
The changing outlook is already forcing analysts to revise price forecasts.
Goldman Sachs raised its December 2026 forecast for Brent crude by $5 to $85 per barrel, while increasing its WTI projection to $80.
For 2027, it raised its forecasts to $80 for Brent and $75 for WTI, based partly on an assumption that disruption to Middle East shipping will extend into next year.
Current market prices are substantially above those year-end projections, illustrating the geopolitical premium traders are placing on immediate supply risks.
Higher Oil Could Complicate Inflation Fight
The consequences extend beyond energy markets.
A sustained period of crude prices near or above $100 per barrel could push up transportation, manufacturing and electricity costs in many economies.
That could complicate attempts by central banks to bring inflation under control and potentially delay interest-rate reductions.
Oil-importing countries face additional pressure through larger import bills, weaker currencies and higher domestic fuel costs.
For oil exporters, higher prices can increase government revenue, but countries whose exports depend heavily on Persian Gulf shipping face a different risk: high prices provide limited benefit if physical supplies cannot reach international buyers.
The conflict therefore presents an unusual combination of potentially higher prices and restricted export volumes.
With diplomatic efforts yet to produce a breakthrough, traders are likely to remain focused on developments around Hormuz, Iranian oil infrastructure and any further military exchanges between Tehran and Washington.
Those developments could determine whether Brent retreats from current levels or breaks decisively through the $100-per-barrel threshold.
