Crude Oil Surges Past $95 Amid Escalating Geopolitical Tensions and US Strikes on Iran

Crude Oil Surges Past $95 Amid Escalating Geopolitical Tensions and US Strikes on Iran​

Brent crude futures climbed significantly on Thursday, reaching $96 a barrel after the United States carried out its 12th consecutive night of attacks against targets in Iran. This surge follows renewed military actions between Washington and Tehran, intensified by reports of Iranian Revolutionary Guards targeting oil tankers. The latest movements underscore the escalating tensions surrounding global oil transit routes, putting pressure on energy markets.

Oil Prices Climb to Six-Week High Amid Conflict Escalation​

Brent crude futures saw a sharp rise of $1.93, or 2%, closing at $96 a barrel. This figure marks the highest level for the benchmark in over six weeks. Earlier, the benchmark had traded at $94.07, which was still below the previous six-week high. Meanwhile, U.S. West Texas Intermediate crude gained $1.44, or 1.7%, landing at $88.27 after a strong performance on Wednesday.

US Military Strikes and Iranian Counter-Responses​

The U.S. military confirmed its execution of the 12th straight night of attacks targeting Iran. These latest strikes came in the wake of President Donald Trump threatening to destroy an Iranian power plant or bridge for every ship fired upon in the Strait of Hormuz. This threat dramatically escalated tensions around this vital oil transit route.

Iran’s Revolutionary Guards reported that an oil tanker caught fire after an explosion while attempting to pass through a purported mined route south of the Strait of Hormuz. The same group announced that two other tankers turned back, stating that the strait remained under their control and was completely closed due to ongoing U.S. military action.

Houthi Threat Expandsening Global Shipping Risk​

The conflict has also spread concern to another key shipping thoroughfare. Iran-aligned Houthis have threatened vessels carrying Saudi oil through the Bab el-Mandeb Strait and announced a naval blockade of Saudi Arabia. This threat specifically targeting shipments through the Red Sea significantly heightens the risk of wider disruption to global energy supplies beyond the Gulf region.

An Iranian Revolutionary Guards spokesperson also issued a warning on X, stating that the southern route through the Strait of Hormuz had been mined, adding to the volatility in oil markets this month. The importance of the Red Sea for Persian Gulf crude cargoes has become increasingly critical as disruptions mount.

Goldman Sachs Warns Brent Could Hit $120​

Goldman Sachs has issued a warning that Brent crude could rise up to $120 a barrel if disruptions continue through the Strait of Hormuz, which is one of the world's most important oil transit routes. While this upside risk exists, the bank’s base case suggests that tensions in the Middle East are expected to eventually subside.

If regional instability eases, Goldman Sachs projects Brent crude could average $80 a barrel in the fourth quarter and fall to $75 next year. However, analysts cautioned that risks remain skewed toward the upside regarding these forecasts, citing potential shipping disruptions through both the Red Sea and the Strait of Hormuz.

Expert View: Geopolitical Risk Driving Market Focus​

Anindya Banerjee, Head of Commodity Research at Kotak Securities, stated that crude oil prices are once again reflecting extreme geopolitical risks. He noted that any strike on major Gulf export infrastructure could force a retest above $95 and potentially higher.

Banerjee explained that the market's focus has shifted away from the military strikes themselves toward the diminishing chances of a diplomatic resolution. He pointed out that Tehran has introduced new conditions for resuming negotiations, making every development push back the return of normal tanker traffic through the Strait of Hormuz. Shipping activity in the waterway remains well below pre-war levels.