Oil prices are surging, with Brent crude nearing $100 a barrel and West Texas Intermediate (WTI) above $92, following renewed tit-for-tat strikes between the US and Iran targeting vessels in and around the Strait of Hormuz. On Monday, Brent crude futures rose by $0.79 to $97.07 a barrel, while WTI increased by $0.80 to $92.28 a barrel. These attacks have intensified concerns about a prolonged disruption in oil supply from the Middle East, a region historically responsible for a fifth of global oil supplies through the Strait of Hormuz.
The recent escalation has significantly reduced shipping activity in the Strait of Hormuz. Over the past 10 days, an average of only 10 commodity ships transited the Strait daily, the lowest since May. This slowdown is prompting fears of a larger supply shock, as noted by Priyanka Sachdeva, head of market insights at Phillip Nova. Analysts at ANZ believe that a prolonged standoff with calibrated military action is the most likely scenario, which will delay the full recovery of Middle East supply, not expecting a return to pre-war throughput until late Q1 or early Q2 2027.
Several analysts anticipate Brent crude prices to enter the three-digit range in September. Informist Media’s poll suggests the November Brent crude oil contract could range from $86.25 to $105.00 per barrel. Arthavrksh Financial Services founder Ravindra Rao indicated that a sustained daily close above $97.50 could lead to a test of $102-$104 per barrel. IndusInd Securities' Jigar Trivedi foresees prices rising to $105 per barrel if attacks escalate, with some analysts even projecting $110 per barrel. Goldman Sachs suggested prices could climb as high as $120 a barrel if disruptions broaden, although they also consider a scenario where prices fall to $80 if Middle East exports normalize, highlighting the significant uncertainty.
The geopolitical premium embedded in Brent crude is estimated at roughly $10 per barrel, with Brent trading near $95 compared to the EIA's $85 Q3 2026 baseline forecast. This reflects the market pricing in disruption risk rather than confirmed supply loss. The U.S. Energy Information Administration's analysis shows that oil flows through Hormuz plummeted from an average of 21.6 million barrels per day in Q4 2025 to just 4.9 million barrels per day in Q2 2026, with crude and condensate shipments dropping from 15.9 million to 3.7 million barrels per day.
