Oil climbs as Middle East tensions raise fears of supply cuts

Oil markets extended gains on Tuesday, with Brent futures reaching $97.34 a barrel and U.S. West Texas Intermediate climbing to $92.63, as the threat of a drawn-out Middle East conflict deepened. Iran warned that any further U.S. attacks on its assets would be met with retaliation, heightening worries about the security of Gulf oil flows. The escalation follows a weekend of reciprocal strikes, including U.S. hits on three Iranian tankers near Kharg Island and Iranian Revolutionary Guard attacks on U.S. warships.

Analysts from ANZ and Marex predict that Persian Gulf supplies could remain limited through the end of 2026, with a full return to pre-conflict volumes unlikely before early 2027. In response, Goldman Sachs lifted its Brent and WTI price targets for December 2026 and 2027, reflecting expectations of ongoing shipping disruptions.