Oil prices rallied in post-market trading on Tuesday, propelled by reports that Iran had launched a second previously undisclosed wave of attacks on US naval vessels this week. The international benchmark Brent crude futures advanced approximately 2%, reaching $99.05 per barrel, up from its prior close of $97.92, while US WTI crude futures surged 2.8% to $94.04 per barrel, compared with the earlier settlement of $93.03.
On Tuesday, the US Central Command announced that American forces had destroyed five Iranian crude oil transport vessels that same day. This action came just two days after Iran's Islamic Revolutionary Guard Corps (IRGC) launched two separate ballistic missile attacks targeting a US Navy warship. The Central Command stated that the American vessel successfully evaded the Iranian strikes and has maintained its patrol operations in the regional waters. No US personnel were injured in the assaults.
Later on Tuesday evening, Iranian sources reported that an Iranian oil tanker had been struck by American missiles approximately four miles off the coast of Kharg Island. Local sources indicated that no casualties occurred during the incident, and the tanker's crew was being evacuated from the area.
Crude prices have climbed more than 8% throughout September, driven by the first direct military confrontation between Washington and Tehran since July. The conflict has further widened this week as Iran-aligned Yemeni militants launched attacks on multiple Saudi Arabian energy facilities, forcing temporary suspensions of some operations. Saudi Arabia's Ministry of Foreign Affairs reported that Houthi fighters targeted economic infrastructure in the cities of Abha, Khamis Mushait, Jizan, and Najran, resulting in injuries to more than 70 civilians.
The Saudi Energy Ministry confirmed in a statement that the strikes ignited fires across several energy sites, forcing the temporary closure of some installations. The world's largest oil exporter added that emergency response teams were working to contain the blazes and assess the extent of the damage. While the kingdom did not specify which type of energy infrastructure was affected, Houthi official media claimed the group had used drones and ballistic missiles to strike Saudi Aramco facilities in the southern region of the country.
In response, the Saudi Foreign Ministry asserted: "Saudi Arabia reiterates its right to take all necessary measures to defend national sovereignty, protect state assets, and ensure the safety of citizens and residents."
The latest escalation follows a US strike on Saturday against three Iranian oil tankers, which served as retaliation for Tehran's ballistic missile attacks on two naval vessels. Iran's Foreign Ministry condemned the tanker strike as a "war crime" and an act of "economic warfare" in a statement released that same day.
"If you attack our assets, you will face retaliation," Mohammad Bagher Ghalibaf wrote in a post on X on Monday. His comments came in response to US Defense Secretary Pete Hegseth, who had warned on social media that Washington would "destroy (and sink)" Iranian oil tankers if Tehran opened fire on American ships.
Goldman Sachs issued a stark warning that escalating Middle East tensions could drive oil prices to $120 per barrel. On Monday, the investment bank raised its price forecasts for Brent crude and WTI for December 2026 by $5, setting them at $85 and $80 per barrel respectively, with 2027 projections of $80 and $75. However, Goldman cautioned that if Gulf region crude production remains 4 million barrels per day below pre-conflict levels, Brent prices could surge above $120 per barrel by 2027, although this is not the bank's baseline scenario.
"We believe that more frequent shipping attacks in the Strait of Hormuz and the Red Sea region are the most likely drivers of this production decline and price increase scenario," wrote Daan Struyven, Goldman's head of oil research, in a Monday report. The bank anticipates that Middle East shipping disruptions will persist through 2027, with production gradually recovering in the second half of next year. "The market is increasingly pricing in a protracted Middle East conflict," Struyven added.
US President Donald Trump took to social media on Monday to argue: "When we win the war with Iran, oil prices will plummet off a cliff, just like everything else is falling (but even more so!). Prices will first drop to $3 per gallon, and eventually fall below $2. All of this will happen rapidly, and Iran will never possess nuclear weapons."
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