FILE PHOTO: Oil tankers pass through the Strait of Hormuz, December 21, 2018.
Hamad I Mohammed | Reuters
Oil prices extended gains Tuesday and were hovering at six-week highs on worries over escalating Mideast tensions after the U.S. and Iran traded strikes over the weekend.
Futures for international benchmark Brent crude for November delivery gained 1.1% at $97.00 a barrel. U.S. West Texas Intermediate futures for October advanced 2.1% to $93.43 per barrel.
Brent
The U.S. military struck three Iranian oil tankers on Saturday after Iran launched ballistic missiles at two Navy warships. The Iranian Foreign Ministry, in a statement on Saturday, denounced the attacks on commercial vessels as a “war crime” and an act of “economic warfare.”
“This appears to be a major escalation and tensions have once again ratcheted higher,” said David Morrison, senior market analyst at Trade Nation, noting that U.S. Energy Secretary Chris Wright had said it may prove impossible to reach a deal with Iran to prevent it obtaining a nuclear weapon.
The tit-for-tat strikes over the weekend also helped to push gas prices higher, hitting record highs.
Tensions between Washington and Tehran continued to simmer. “Strike our assets and you get struck,” Iranian Parliament Speaker Mohammad Bagher Ghalibaf wrote Monday in a post on X.
That was in response to Defense Secretary Pete Hegseth’s post who wrote that the U.S. “will destroy (and sink)” Iranian oil tankers if Iran fires on U.S. vessels.
Goldman Sachs on Monday raised its forecasts for Brent and WTI prices by $5 to $85 and $80 per barrel, respectively, for December 2026 and to $80 and $75 per barrel, respectively, for 2027.
The bank expects Mideast shipping disruptions to continue into 2027, with production gradually recovering by the second half of 2027. “Markets are increasingly pricing a prolonged Mideast conflict,” Goldman said, adding that Persian Gulf-to-China crude tanker rates in the second quarter of 2027 now price shipping disruptions lasting into that period.
President Trump in a post on Monday stateside said that “Oil prices will drop precipitously … when we WIN the war with Iran.”
—CNBC’s Greg Iacurci contributed to the report.
