Crude oil benchmarks reached their highest levels since late July after another wave of attacks targeted energy infrastructure in the Middle East. Reports of explosions at Iran's crucial oil export hub, Kharg Island, have reignited concerns over potential supply disruptions in the market.
Brent crude settled approximately 1% higher at $97.92 a barrel, having briefly approached the $100 mark during intraday trading. Meanwhile, West Texas Intermediate (WTI) futures advanced 1.7% from Friday's close to settle at $93.03 a barrel, marking the highest level since early June. The price surge follows Saudi Arabia's announcement that several of its energy facilities had been forced to halt operations due to attacks by Houthi rebels.
Shortly before Brent's settlement, Iran's semi-official Mehr news agency reported explosions originating from Kharg Island. As the primary export terminal for Iranian crude, any potential disruption at this facility is viewed with heightened sensitivity by the market.
Analysts at Goldman Sachs, including Daan Struyven, noted in a report that "the market is increasingly pricing in a scenario of prolonged conflict in the Middle East." The investment bank has modestly raised its oil price forecasts, operating on the assumption that shipping disruptions could persist through 2027, adding that "risks to the price outlook remain significantly tilted to the upside."
Trading volumes were relatively light following the extended US Labor Day weekend, which likely contributed to amplified price volatility. Beyond the geopolitical tensions in the Middle East, oil traders are also directing greater attention toward the outlook for refined products markets.
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