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SINGAPORE: Oil prices extended gains to multi-week highs on Tuesday \u200cas risks of a prolonged conflict in the Middle East grew after Iran threatened to retaliate against any new U.S. attacks on its assets, heightening worries over supply disruption.<\/strong><\/p>\n Brent crude futures were up $1.25, or 1.3%, to $98.25 a barrel by 0630 GMT. U.S. West \u200bTexas Intermediate crude was at $93.70 a barrel, up $2.22, or 2.4%.<\/p>\n The Reuters Power Up newsletter by columnist Ron Bousso provides everything you need to know about the global energy industry. Sign up here. Following Monday\u2019s Labor Day holiday in the U.S., WTI was playing catch-up to Brent, which absorbed the weekend\u2019s \u200bescalation a day earlier, said Suvro Sarkar, head of energy research at DBS Bank.<\/p>\n \u201cOverall, we believe the recent uptick \u200bin hostilities between the U.S. and Iran has the potential to materially change markets\u2019 reading of oil price related risks not only for the rest of 2026, but well into 2027 now,\u201d he said.<\/p>\n Iran threatened the U.S. with \u201ceconomic warfare\u201d and said it fired an \u200badvanced missile at U.S. warships while Iran-backed Houthis struck several Saudi cities, wounding 73 people and causing some energy \u200bfacilities to halt operations, highlighting risks of a wider escalation.<\/p>\n On Saturday, U.S. forces had struck three Iranian oil tankers, including one near \u200cKharg Island, \u2060Iran\u2019s main oil export hub, according to U.S. Central Command. The attacks followed strikes by Iran\u2019s Revolutionary Guards on U.S. warships operating in the region.<\/p>\n \u201cThe recent escalation of the Middle East conflict has increased the likelihood of a prolonged standoff, punctuated by calibrated military action by the U.S. and Iran. This could see Persian Gulf supply remain \u200bconstrained through the rest \u200bof 2026,\u201d Daniel Hynes, an \u2060analyst at ANZ, said in a note.<\/p>\n \u201cWe don\u2019t expect a full return to pre-war throughput until late Q1 or early Q2 2027.\u201d<\/p>\n Shipping traffic through the Strait of Hormuz \u200balso slowed at the start of this week, after Iran threatened on Monday to \u200bretaliate for any \u2060new U.S. attacks.<\/p>\n All three major U.S. stocks indexes closed lower on Friday, with the Dow, S&P 500 and Nasdaq dropping between a quarter and a half of a percent.<\/p>\n Meanwhile, Goldman Sachs raised its Brent and WTI price forecasts by $5 to $85 and $80, respectively, for December 2026 and to $80 and $75, respectively, for 2027, reflecting its new assumption that Middle East shipping disruptions continue into 2027.<\/p>\n In financial services platform \u2060Marex\u2019s September \u200bcommodity outlook, analyst Ed Meir said that as long as the \u200bwar continues, which it thinks it will given \u201cthe multitude of issues that have yet to be addressed\u201d, crude oil prices will likely remain elevated \u200bthrough year-end.<\/p>\n<\/div>\n
Brent earlier rose to as much as $98.79 a \u200bbarrel, its highest since July 24, while WTI reached $94.21 a barrel, its highest since June \u20608.<\/p>\n