Oil extends gains as renewed Mideast hostilities raise worries of prolonged conflict

Oil prices extended gains Tuesday, rising for a third straight day, and hovering at six-week highs due to escalating Mideast tensions. The U.S. and Iran traded strikes over the weekend, with the U.S. military striking three Iranian oil tankers on Saturday after Iran launched ballistic missiles at two Navy warships. The Iranian Foreign Ministry denounced the attacks as a 'war crime' and 'economic warfare.' David Morrison, senior market analyst at Trade Nation, noted that U.S.

Energy Secretary Chris Wright suggested it may be impossible to reach a deal with Iran to prevent nuclear proliferation. The tit-for-tat strikes pushed gas prices to record highs. Tensions between Washington and Tehran continued to simmer.

Iranian Parliament Speaker Mohammad Bagher Ghalibaf warned that striking U.S. assets would result in retaliation. Defense Secretary Pete Hegseth threatened to destroy Iranian oil tankers if Iran fired on U.S. vessels. Goldman Sachs raised its forecasts for Brent and WTI prices, expecting Mideast shipping disruptions to persist into 2027 with gradual production recovery by the second half of 2027.

Markets are increasingly pricing a prolonged Mideast conflict. President Trump stated that oil prices would drop precipitously if Iran were defeated in war.

Source: cnbc.com