The situation in the Middle East continues to drive up volatility in the crude oil market. International oil prices have risen following the latest round of conflict news, with Brent crude reaching above $99 per barrel, and US WTI crude also seeing a concurrent increase. The market has begun to take into account again the risks of disruptions to supply and shipping in the Gulf region.
Oil prices rise to a phased high
It is reported that Brent crude oil futures rose by about 2% to $99.05 per barrel, closing at $97.92 on the previous trading day. West Texas Intermediate crude oil ( WTI ) in the United States increased by 2.8% to $94.04 per barrel, from a previous close of $93.03.
Since September, oil prices have risen by more than 8% in total. The core factor driving the market is that the United States and Iran have once again launched military strikes against each other for the first time since July, significantly increasing market concerns about disruptions to Middle Eastern energy supplies.
Saudi energy facilities attacked
This week, the scope of conflict further expanded. The Houthi rebels from Yemen, who are allied with Iran, attacked several Saudi energy facilities, causing some of them to temporarily cease operations.
The Saudi Foreign Ministry stated that economic facilities in Abha, Hamis Mushait, Jizan, and Najran were attacked, resulting in more than 70 civilians being injured. The Saudi Energy Ministry reported that the attacks caused multiple fires, and relevant departments are currently working to control the fires and assess the damages.
Riyad has not disclosed the specific type of facilities that were attacked. However, media controlled by Houthi militants claimed that the targets of the attack included facilities of Saudi Aramco in the southern region, and that drones and ballistic missiles were used in the assault.
Market Focuses on the Risk of Shipping Disruptions
In addition to land-based facilities, the risks associated with maritime transportation are also increasing. Iranian state media reported that a U.S. missile struck a small oil tanker about 4 miles off the coast of Hormuz Island on Tuesday. Meanwhile, markets continue to monitor whether there will be more severe disruptions to transportation in the Strait of Hormuz and the Red Sea routes.
Goldman Sachs has raised its forecasts for Brent and WTI crude oil prices in December 2026 by $5 each, to $85 per barrel and $80 per barrel respectively; the forecasts for 2027 are $80 per barrel and $75 per barrel respectively.
Goldman Sachs stated that if Gulf region crude oil production remains 4 million barrels per day below pre-war levels by 2027, Brent oil prices could exceed $120 per barrel. The bank believes that more frequent attacks on shipping in the Strait of Hormuz and the Red Sea are the main triggers for the scenario of low production and high oil prices.
Goldman Sachs also expects that disruptions in Middle Eastern shipping may continue until 2027, while crude oil production could gradually recover in the second half of next year. As the conflict persists, the market is more clearly reflecting the risks of a long-termization of the situation in the Middle East.
