Oil Rises Amid Escalating Middle East Conflict Risks - Sarmad

Oil prices continued to rise on Tuesday as fears mounted that the Middle East conflict could drag on, following Iran’s threat to retaliate against any new US attacks targeting its assets, heightening concerns about supply disruptions.

Brent crude futures rose 34 cents, or 0.35 percent, to $97.34 per barrel by 0000 GMT. US West Texas Intermediate crude reached $92.63 per barrel, up $1.15, or 1.26 percent.

Brent crude recorded its highest level since July 24 in the previous session, as traders continued to factor in a risk premium amid escalating tensions around the Strait of Hormuz, a vital artery for global crude oil shipments.

Iran warned on Monday that energy infrastructure across the Gulf region, including US-linked oil and gas interests, was at risk.

This comes after reciprocal strikes early in the week, with no signs of progress toward a diplomatic breakthrough.

The US Central Command stated that its forces targeted three Iranian oil tankers on Saturday, including one off the coast of Kharg Island, Iran’s main oil export hub, following attacks by the Islamic Revolutionary Guard Corps on US warships in the region.

Daniel Hynes, an analyst at ANZ, wrote in a note that “the latest escalation in the Middle East conflict has increased the likelihood of a protracted confrontation, punctuated by measured military actions by the United States and Iran. This could lead to continued supply constraints from the Gulf for the remainder of 2026.”

He added, “We do not expect a full return to pre-war production levels until late in the first quarter or early in the second quarter of 2027.”