Oil prices extended gains to multi-week highs on Tuesday as risks of a prolonged conflict in the Middle East grew after Iran threatened to retaliate against any new US attacks on its assets, heightening worries over supply disruption. Brent crude futures were up $1.25, or 1.3%, to $98.25 a barrel by 0630 GMT. US West Texas Intermediate crude was at $93.70 a barrel, up $2.22, or 2.4%, Reuters reported. Brent earlier rose to as much as $98.79 a barrel, its highest since July 24, while WTI reached $94.21 a barrel, its highest since June 8. Following Monday's Labor Day holiday in the US, WTI was playing catch-up to Brent, which absorbed the weekend's escalation a day earlier, said Suvro Sarkar, head of energy research at DBS Bank. "Overall, we believe the recent uptick in hostilities between the US and Iran has the potential to materially change markets' reading of oil price related risks not only for the rest of 2026, but well into 2027 now," he said. Iran threatened the US with "economic warfare" and said it fired an advanced missile at US warships. On Saturday, US forces had struck three Iranian oil tankers, including one near Kharg Island, Iran's main oil export hub, according to US Central Command. The attacks followed strikes by Iran's Revolutionary Guards on US warships operating in the region. Shipping traffic through the Strait of Hormuz also slowed at the start of this week, after Iran threatened on Monday to retaliate for any new US attacks. 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.
