Crude Oil Reclaims $90 Amid Geopolitical Tensions as Shipping Attacks Threaten Global Flow

Crude Oil Reclaims $90 Amid Geopolitical Tensions as Shipping Attacks Threaten Global Flow​

Oil prices extended gains on Wednesday, successfully reclaiming the $90 mark after fresh reports of attacks on international shipping vessels intensified fears of prolonged supply disruptions in the Middle East. Brent crude futures rose 0.81% at $89.63, while US West Texas Intermediate (WTI) gained 0.85%, closing at $83.91. These increases follow a significant jump on Monday, fueled by growing uncertainty surrounding a potential peace agreement between the United States and Iran.

Rising Maritime Risks Fuel Oil Market Anxiety​

The rally was primarily driven by heightened maritime security concerns in critical chokepoints. Reports from both the US and Yemen's Iran-aligned Houthis indicated attacks targeting shipping vessels within the Strait of Hormuz and the Bab el-Mandeb Strait on Tuesday. These threats are severely impacting market stability.

Iran’s top security official, Mohsen Rezaei, publicly stated that the Strait of Hormuz would remain closed unless Washington agreed to Tehran's conditions for ending the war, including the release of frozen Iranian assets. The seriousness of this situation is underscored by UAE's ADNOC, which reported that 15 of its vessels had been attacked while passing through the Strait of Hormuz since the conflict began.

Supply Chain Bottlenecks and Operational Delays Loom​

Beyond the active threat of attacks, oil supply concerns are mounting due to operational delays in regional infrastructure. Saudi Aramco has postponed the restart of its Jazan refinery, a 400,000-barrel-per-day facility. This delay was announced after the Houthis claimed responsibility for two attacks on the facility on Sunday.

The combination of these threats and operational slowdowns is keeping energy flows under pressure in the near term. Market participants are noting that even temporary restrictions or the threat of further violence are driving up insurance costs, forcing ships to navigate longer routes through troubled waters.

Expert Outlook: Disruption Could Push Brent Past $120​

The duration of these regional disruptions has emerged as a crucial factor for the future trajectory of crude prices. JPMorgan estimates that every additional month of disruption could drive Brent up by approximately $7 to $8 per barrel, predicting an average monthly price near $114 if the crisis spans three months.

Goldman Sachs warned similarly that Brent could surge toward $120 a barrel should shipping disruptions continue through the Strait of Hormuz, identified as one of the world's most important oil transit routes. However, Goldman Sachs maintains a base case suggesting that Middle East tensions will eventually ease, projecting Brent to average $80 a barrel in the fourth quarter and $75 next year.

Kotak Securities offered an unchanged outlook, noting that while risks remain tilted toward the upside, global factors are pulling toward stability. The firm stated that oil is expected to cool as the market moves into 2027 due to expanding supply outside the conflict zone, driven by increased production targets from OPEC+ and record output from the UAE.