Oil prices climbed on Tuesday, with Brent crude extending gains above $98 per barrel as investors assessed the risk of further disruption to Middle East energy supplies.
The move came after Iran warned that oil and gas infrastructure across the Gulf could become targets in retaliation for attacks on Iranian assets.
Brent Crude Extends Gains Above $98
Brent crude futures for November delivery rose around 1.7% to $98.64 per barrel.
U.S. West Texas Intermediate crude futures climbed even more sharply, gaining about 2.7% to $93.92 per barrel.
Brent had already settled nearly 1% higher on Monday after briefly reaching the $98 level during the previous session.
The latest move keeps the global oil benchmark within reach of the psychologically important $100-per-barrel mark.
Iran Threatens Gulf Energy Infrastructure
Oil markets reacted after Iran warned that it could respond to what it described as U.S. economic pressure by imposing a maritime exclusion zone across parts of the Persian Gulf.
The warning followed a weekend of escalating strikes between the United States and Iran, including incidents involving shipping.
Iranian officials have since said that U.S.-linked oil and gas assets across the Gulf could be vulnerable to retaliation.
Iranian Parliament Speaker Mohammad Baqer Qalibaf argued that energy infrastructure across the region remains highly exposed and warned that attacks on Iranian assets could trigger a direct response.
Strait of Hormuz Remains the Main Risk
The Strait of Hormuz remains the biggest concern for global oil markets.
Iran has said it plans to introduce a new restricted zone in the Gulf along with an alternative shipping corridor.
That has raised concerns that tighter controls could slow tanker traffic through one of the world’s most important energy transit routes.
Any sustained disruption in the Strait of Hormuz could have a major impact on crude oil and liquefied natural gas shipments.
Maritime Restrictions Add to Supply Concerns
Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, also warned that further economic pressure could be met with a broader maritime exclusion zone.
The comments have increased concerns that the conflict could move beyond military targets and begin to interfere more directly with commercial energy flows.
For traders, even the possibility of restricted tanker movement is enough to increase the geopolitical risk premium in oil prices.
Goldman Sachs Raises Oil Price Forecasts
Goldman Sachs recently raised its forecasts for both Brent and WTI crude.
The bank increased its December 2026 Brent target by $5 to $85 per barrel and its WTI forecast to $80.
For 2027, Goldman now expects Brent to average around $80 and WTI around $75.
The bank said it expects shipping disruptions across the Middle East to continue into 2027.
Why Goldman’s Forecast Increase Remains Limited
Despite the elevated geopolitical risk, Goldman Sachs kept its forecast increase relatively modest.
One reason is that commercial oil inventories across OECD countries have not fallen as sharply as expected.
The market has adjusted to supply disruptions more effectively than some analysts initially anticipated.
Stock declines have instead been concentrated in strategic reserves, oil held at sea and Chinese inventories.
Middle East Supply Could Adapt
Goldman also expects regional oil supply to gradually adjust.
Production could begin recovering during the second half of 2027 as alternative shipping routes, so-called dark flows and new pipeline infrastructure become more important.
This could help reduce some of the pressure created by disruptions in traditional export routes.
However, the outlook remains highly dependent on how the U.S.-Iran confrontation develops.
Iran and Oman Discuss Strait of Hormuz Deal
Iran has also said it is close to reaching an agreement with Oman over arrangements for the Strait of Hormuz.
Such a deal could potentially provide a mechanism to reduce shipping disruptions.
Still, oil markets remain cautious.
Investors appear skeptical that diplomatic efforts will quickly resolve the broader tensions between Washington and Tehran.
Oil Prices Already Reflect Rising Geopolitical Risk
The conflict has already had a major impact on energy markets.
Brent crude gained around 8% last week, while WTI rose nearly 10%.
The rally reflects growing concern that attacks, shipping restrictions or infrastructure damage could further tighten global oil supply.
For now, Brent remains close to $100 per barrel, with traders closely watching developments around the Strait of Hormuz and any new threats to Gulf energy infrastructure.
