WTI crude jumped 4.4% to $100.27 a barrel and Brent rose 4% to $105.24 on Thursday as fighting between the U.S. and Iran sharply escalated in the seventh month of the conflict. Goldman Sachs warns prices could surge past $120 a barrel if attacks on shipping intensify, and Trump advisers reportedly see no clear end in sight.
Crude jumps as fighting intensifies
Crude oil prices rose 4% on Thursday after fighting between the U.S. and Iran sharply escalated this week, with the war now dragging into its seventh month with no end in sight. U.S. West Texas Intermediate futures jumped 4.4% to $100.27 per barrel by 8:57 a.m. ET, while Brent crude, the international benchmark, advanced 4% to $105.24 a barrel.
Separately, Brent pushed firmly above $100 a barrel, reaching around $105, while WTI traded around $100, as markets price in a longer period of constrained supply. Fighting erupted this month after a period of relative calm in August, and Iran has tried to attack American warships over the past several days while the U.S. military has destroyed eight Iranian tankers since Saturday in retaliation.
Goldman sees risk of $120 oil
The escalation is raising the risk of oil prices surging above $120 a barrel as attacks on shipping intensify, said Daan Struyven, co-head of global commodities research at Goldman Sachs. Andrei Constantin, commercial director and trading adviser at TFP Software FZCO, said the physical market may be tightened further by a decline in transit volumes, broader escalation, or threats to energy infrastructure.
According to Trade Nation's David Morrison: "WTI has completely unwound its selloff between early June and July", while Brent prices are now well above those seen in early June. If traders keep pushing the expected resolution further out, the risk premium embedded in crude prices is likely to keep building.
No end in sight despite midterm promise
Top White House advisers have privately raised with Trump the possibility that the Iran war could drag on through the remainder of his term, past Inauguration Day in January 2029, according to a Wall Street Journal report cited by CNBC. That contradicts Trump's claim on Wednesday that the war would end immediately after the midterm elections, a promise he has repeated for months even as fighting escalated.
Trump also said Wednesday that oil and gasoline prices would fall after the midterms. But retail gasoline prices hit a Labor Day record on Monday, and diesel prices are expected to cross $6 per gallon for the first time ever in the coming days.
Sources: CNBC, Investinglive
Trading involves risk.
Risk Disclaimer
