Oil prices inched higher on Tuesday as conflict in the Middle East continues to intensify, disrupting global oil supplies for over six months now. Brent crude was up 0.05%, or $0.05, at $97.05 while WTI crude rose 1.03%, or $0.94, to $92.42.The latest gains came after Iran warned that it would retaliate against any further US attacks on its assets, adding to concerns that the conflict could drag on and threaten energy infrastructure and shipping in the Gulf.The Strait of Hormuz remains a focus for traders, with heightened tensions around the key route for global crude shipments prompting them to build a risk premium into oil prices. Brent had already climbed to its highest level since July 24 in the previous session.Iran on Monday warned that energy infrastructure across the Gulf, including US oil and gas interests, was vulnerable. The warning followed a weekend of tit-for-tat strikes, with no indication of progress towards a diplomatic breakthrough.The US strikes on Saturday targeted three Iranian oil tankers, including one near Kharg Island, Iran’s main oil export hub, according to US Central Command. The attacks came after strikes by Iran’s Revolutionary Guards on US warships operating in the region.The escalation has also prompted Goldman Sachs to revise its oil-price outlook. The bank raised its Brent and WTI forecasts by $5 to $85 and $80, respectively, for December 2026. For 2027, it raised its forecasts to $80 and $75, respectively, based on a new assumption that disruptions to Middle East shipping will continue into 2027.Marex analyst Ed Meir also expects crude prices to remain elevated through the end of the year as long as the war continues. In the financial services platform’s September commodity outlook, Meir said this was likely given “the multitude of issues that have yet to be addressed”.
Trump claims oil prices
US President Donald Trump, meanwhile, said oil prices would fall sharply once the US achieves victory in its conflict with Iran and predicted that gas prices could eventually fall below two dollars per gallon.In a post on his Truth Social platform, Trump directly linked high energy costs to the ongoing military operations in the Middle East and said markets would stabilise rapidly after the conflict.“Oil prices will drop precipitously, like everything else is dropping (but more!), when we WIN the war with Iran,” Trump wrote. “Three Dollars a gallon, but ultimately, below Two Dollars a gallon.”Trump also repeated his warning that the US would not allow Iran to have a nuclear weapon.“It will all happen quickly, and Iran will never have a Nuclear Weapon. MAGA!” he added.
Iran warns of retaliation
Iranian Parliament Speaker Mohammad Bagher Ghalibaf had earlier warned Washington against any misadventures towards Iranian energy facilities, saying there would be sharp repercussions.In a post on X, Ghalibaf said Iran’s oil and gas production chain is “sprawling, accessible, and exposed.”He added, “American oil and gas companies across these waters and facilities share that exposure. Strike our assets, and you get struck. We’ve already proven it. Ask the bases that are no longer viable.”Alongside the post, Ghalibaf shared an image stating, “The lost decade of the US Economy is coming, because some clowns at DOW decided so.”His comments came as he shared a post by US secretary of war Pete Hegseth, who claimed that Iran’s “oil tanker fleet is defenceless” and reiterated Washington’s claims that Iran’s navy and air force had been destroyed.