Global oil prices extended their upward trajectory on Tuesday, marking a third consecutive day of gains and reaching six-week highs. The rally is driven by intensifying geopolitical tensions in the Middle East following weekend exchanges of fire between the United States and Iran.
Brent crude for November delivery rose 0.20% to settle at $97.20 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude for October contracts advanced 1.07% to $92.56 per barrel.
The market volatility followed a series of retaliatory attacks. On Saturday, the U.S. military targeted three Iranian oil tankers after Iran launched ballistic missiles at two American Navy warships. The Iranian Foreign Ministry condemned the strikes on commercial vessels as an act of “economic warfare” and a “war crime.”
David Morrison, a senior market analyst at Trade Nation, described the developments as a significant escalation. He noted that tensions have ratcheted higher, compounded by remarks from U.S. Energy Secretary Chris Wright, who suggested that securing a deal with Iran to prevent nuclear weapons acquisition might prove impossible.
The geopolitical friction has also impacted consumer fuel markets, with gasoline prices hitting record highs over the Labor Day weekend. Diplomatic rhetoric remains sharp, with Iranian Parliament Speaker Mohammad Bagher Ghalibaf posting on X that the country would strike back at any attacks on its assets. This responded to comments from U.S. Defense Secretary Pete Hegseth, who warned that the U.S. would sink Iranian tankers if they attacked American vessels.
In response to the outlook for continued disruptions, Goldman Sachs raised its price forecasts on Monday. The bank projected Brent crude to average $85 per barrel and WTI to average $80 per barrel in December 2026, representing a $5 increase for both benchmarks. For 2027, Goldman expects Brent to average $80 and WTI $75. The institution anticipates that shipping disruptions in the Middle East will persist into 2027, with production gradually recovering in the second half of the year.
Goldman added that markets are increasingly pricing in a prolonged conflict, citing Persian Gulf-to-China crude tanker rates in the second quarter of 2027 as an indicator of expected shipping delays.
President Trump addressed the commodity prices on Monday via social media, stating that oil costs would drop sharply once the U.S. achieves victory in the conflict with Iran.
Three days of gains in a row is scary. I’m just hoping my commute doesn’t cost an arm and a leg this fall.
Wait, the President thinks victory means cheaper gas? That logic is dangerously simplistic and ignores supply chains.
Goldman’s forecast seems optimistic. If shipping routes stay blocked, Brent could easily blow past $100 by winter.