Oil prices continued their upward trajectory on Tuesday, with market sentiment rattled by fresh attacks on Saudi energy infrastructure that have intensified fears of a broader conflict between Washington and Tehran. Amid these escalating hostilities, supply disruption risks are being aggressively repriced by traders worldwide.
At 2:10 a.m. Eastern Time, international benchmark Brent crude futures for November delivery climbed 1.36% to reach $98.32 per barrel, while West Texas Intermediate (WTI) futures for October delivery surged 2.37% to $93.65 per barrel, edging ever closer to the psychologically significant $99 threshold for Brent.
According to the Saudi Energy Ministry, the assault launched by Yemen-based, Iran-aligned Houthi forces has forced the suspension of operations at several energy facilities, with the attack leaving over 70 individuals wounded. The world's largest oil exporter has indicated that emergency response teams are currently working to contain fires at the affected sites while assessing the full scope of the damage inflicted.
This latest incident follows a series of tit-for-tat military exchanges between the two nations. In a prior escalation, Iran fired ballistic missiles targeting two U.S. Navy vessels, prompting American forces to strike three Iranian oil tankers on Saturday in retaliation. The Iranian Foreign Ministry subsequently issued a statement condemning the attacks on commercial shipping as a "war crime" and an act of "economic warfare."
David Morrison, Senior Market Analyst at Trade Nation, characterized the situation by stating: "This round of conflict represents a clear and significant escalation, with tensions ratcheting up once again." He also highlighted remarks from U.S. Energy Secretary Chris Wright, who suggested that reaching an agreement with Iran to prevent its acquisition of nuclear weapons may no longer be a viable outcome.
The weekend's barrage of retaliatory strikes has also propelled gasoline prices to unprecedented record highs, adding further strain on consumers already grappling with inflationary pressures. The persistent friction between Washington and Tehran shows no signs of abating, as political rhetoric on both sides continues to harden.
Iranian Parliament Speaker Mohammad Bagher Ghalibaf issued a stark warning on the X platform on Monday, declaring: "Anyone who dares to strike our assets will face retaliation." This statement came as a direct response to a post from U.S. Secretary of Defense Pete Hegseth, who had vowed that America would "destroy (and sink)" Iranian oil tankers should they open fire on U.S. vessels.
In response to the deteriorating geopolitical landscape, Goldman Sachs revised its oil price forecasts upward on Monday. The investment bank raised its December 2026 projections for both Brent and WTI by $5 per barrel, setting them at $85 and $80 per barrel respectively. Additionally, the firm lifted its 2027 forecasts for Brent and WTI to $80 and $75 per barrel.
Goldman Sachs analysts anticipate that disrupted shipping routes in the Middle East will persist through 2027, with crude production expected to gradually recover in the second half of that year. "The market is increasingly pricing in the risk of a prolonged Middle East conflict," the bank noted in its research report, adding that tanker freight rates for crude shipments from the Persian Gulf to China in the second quarter of 2027 already reflect expectations of sustained shipping interruptions through that period.
President Trump weighed in from U.S. soil on Monday, offering a decidedly optimistic take on the situation: "When we win the war against Iran... oil prices will plummet dramatically," he wrote, suggesting that a swift resolution would ultimately benefit global energy markets.
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