Brent Crude Nears $100 as US and Iran Exchange Military Strikes

Oil prices climbed Tuesday after a new round of military exchanges between the United States and Iran intensified a conflict that has already pushed crude up over 8% this month. The attacks have heightened investor concerns about the security of oil supply from the critical Middle East region.

International benchmark Brent crude futures rose approximately 2% to $99.05 per barrel in after-hours trading, after settling the session at $97.92. West Texas Intermediate (WTI), the U.S. benchmark, gained 2.8% to reach $94.04 per barrel, up from its closing price of $93.03.

Escalating Tit-for-Tat Attacks

The latest price surge followed a statement from U.S. Central Command on Tuesday, September 8, which said its forces had destroyed five Iranian crude oil transport ships. The action was described as a response to two separate ballistic missile attacks by Iran's Islamic Revolutionary Guard Corps (IRGC) on a U.S. Navy warship over the previous two days.

According to CENTCOM, the U.S. vessel successfully evaded the Iranian missiles and sustained no casualties. Separately, Iranian media reported on Tuesday evening that a U.S. missile had struck an Iranian oil tanker near Kharg Island. These events follow U.S. strikes on three other Iranian tankers last Saturday in retaliation for earlier missile attacks.

Widening Regional Conflict

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Tensions in the region have broadened, with Iran-allied Houthi militants in Yemen launching attacks on multiple energy facilities inside Saudi Arabia. The Saudi Ministry of Foreign Affairs reported that the attacks targeted economic infrastructure in several cities, causing fires and temporary shutdowns at some facilities.

While Saudi officials did not specify the exact facilities hit, Houthi media claimed its drones and missiles targeted installations belonging to state oil giant Saudi Aramco. The Saudi government stated it reserves the right to take all necessary measures to defend its territory and assets.

Analysts Warn of Higher Prices

The escalating conflict has led some market analysts to revise their price forecasts. In a note Monday, Goldman Sachs warned that Brent crude could surge above $120 per barrel by 2027 if oil production in the Persian Gulf remains 4 million barrels per day below pre-conflict levels, though this is not the bank's baseline forecast.

Daan Struyven, Goldman's head of oil research, noted that more frequent attacks on shipping in the Strait of Hormuz and the Red Sea were the most likely cause for such a scenario. The bank now expects shipping disruptions to persist into 2027, stating that "the market is increasingly pricing in a protracted Middle East conflict."