Oil prices are extending gains amid heightened concerns of prolonged supply disruption from the Middle East, specifically due to tit-for-tat strikes between the US and Iran on vessels in the Strait of Hormuz. Brent crude futures climbed $0.52 to $96.80 a barrel, while US West Texas Intermediate (WTI) crude was up $0.66 to $92.14 a barrel. Brent rose 7.8% and WTI gained nearly 10% in the week ended September 6, following a resumption of attacks that reduced oil flows through the Strait of Hormuz, a critical waterway for a fifth of the world’s oil supply. Maritime intelligence firm Marisks described the Saturday attacks as a "major escalation in the maritime conflict," noting that commercial tankers are now being deliberately used as instruments of reciprocal economic pressure.
The escalating tensions and their impact on oil prices are being closely watched by analysts. Argus Media's Chief Economist, David Fyfe, warned that dwindling global inventories and localized shipping bottlenecks could push oil futures back into triple digits, potentially past $100. Goldman Sachs Group Inc. further suggested that oil could rally to as much as $120 a barrel if attacks on shipping in the Middle East intensify. Daan Struyven, co-head of global commodities research at Goldman Sachs, highlighted the increased risk of shipping disruptions broadening and intensifying, recommending investors hedge geopolitical risks by investing in natural gas and refined-oil products, as their supply shocks are currently greater than in the crude market.
Adding to the bullish outlook, OPEC+ kept its oil output policy unchanged for October at a meeting on Sunday, removing a potential source of additional supply to counter the disruptions. This decision, combined with falling crude inventories (a 4.5 million-barrel draw last week) and high refinery runs (98% capacity), creates a strong upward pressure on prices. Data from analytics firm Kpler showed that an average of only 10 commodity ships transited the Strait of Hormuz per day over the past 10 days, the lowest since May. Iran also plans to announce a restricted zone outside the Strait of Hormuz in the coming days, which would further constrain shipping and add to the risk premium for crude. Analysts from ANZ expect exports to remain constrained through the rest of 2026, with a return to pre-war throughput not anticipated until late first quarter or early second quarter of 2027.
