Brent crude climbed toward $99 a barrel on Tuesday as Iran threatened to strike Gulf oil and gas infrastructure and Houthi attacks halted operations at Saudi energy facilities. Goldman Sachs raised its Brent forecast twice in three days and now says the benchmark could exceed $120 a barrel if Gulf supply stays disrupted into 2027.
Brent Oil Futures expiring in November climbed 1.8% to $98.76 a barrel by 05:36 ET Tuesday, while U.S. West Texas Intermediate crude rose 2.8% to $94.05 a barrel. The move followed an Iranian warning that oil and gas infrastructure across the Gulf could be targeted in retaliation for strikes on its own assets.
The threat came after a weekend of tit-for-tat strikes between the U.S. and Iran, including attacks on shipping. Iranian Parliament Speaker Mohammad Baqer Qalibaf said: "Strike our assets, and you get struck." Iran has also said it will introduce a new restricted zone in the Gulf alongside an alternative oil shipping corridor.
Saudi facilities halted after Houthi strikes
Saudi authorities said operations at several energy facilities in the kingdom's south were halted after attacks by Yemen's Iran-aligned Houthis wounded more than 70 people. Saudi Aramco's Jizan refinery, a 400,000 barrel-a-day plant already shut since an earlier attack in July, was hit again on Monday.
Shipping traffic through the Strait of Hormuz has also slowed this week. Just seven commodity vessels crossed the strait on Monday, down from eight on Sunday and far below the roughly 130 ships a day that transited before the war began.
Goldman raises its price forecasts twice in three days
Goldman Sachs raised its Brent and WTI forecasts by $5 on Sunday, to $85 and $80 for December 2026 and $80 and $75 for 2027, saying it expects Middle East shipping disruptions to persist into 2027. The bank went further on Monday: commodities research head Daan Struyven lifted the year-end forecast to $90 a barrel and the 2027 average to $80. Struyven warned Brent might exceed $120 a barrel if 2027 average Gulf output stays 4 million barrels per day below pre-war levels.
The increases remain modest relative to that scenario for two reasons. OECD commercial land inventories have barely drawn down since the war began, and Struyven expects Middle East supply to keep adapting through dark flows and new pipelines coming online later in 2027.
A diplomatic opening remains unresolved
Iran has said a deal with Oman over Strait of Hormuz arrangements is close, which could ease shipping disruptions. But markets remain skeptical that diplomacy will quickly end the wider U.S.-Iran confrontation. The conflict has already pushed Brent 8% higher last week, while WTI rose nearly 10%.
Sources: Commodities & Futures News, MarketWatch.com, The Guardian
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