Industry Odisha Bureau, Sep 14: Brent crude jumped near $108 a barrel on Monday. WTI crude rose towards $103. Middle East tensions and Strait of Hormuz risks are driving the surge.
Oil prices extended sharp gains on Monday. Brent crude futures rose around 3%. They traded near $108 per barrel. WTI crude futures also gained roughly 3%. WTI traded close to $103 per barrel. Escalating Middle East tensions drove the move.
Middle East Tensions Push Brent Towards $108
Oil had already gained around 8% last week. Prices moved above $100 for the first time since July. Fresh attacks involving Gulf vessels deepened supply concerns. Investors are increasingly focused on physical export risks. Shipping disruptions have become a key price driver.
Strait of Hormuz Adds Shipping Risk
An Iranian cargo vessel was struck on Sunday. Iranian state media reported the incident occurred in the Strait of Hormuz. Iran then postponed a planned briefing for neighbouring countries. That briefing was meant to address shipping management in the strait. President Masoud Pezeshkian struck a defiant tone. “Our people can’t be bullied into submission, Iran won’t surrender,” he said. The remarks came amid continuing regional friction.
Saudi Pipeline Outage Deepens Supply Concerns
Saudi Arabia’s East-West oil pipeline was shut on Friday. The closure followed a drone strike originating from Iraq. That pipeline normally lets Saudi Arabia bypass the Strait of Hormuz. Its disruption threatens up to 4% of global oil supply. The outage has heightened sensitivity to Hormuz-related risks.
Goldman Sachs Sees $120 Scenario
Goldman Sachs outlined a scenario where oil could reach $120. That outcome depends on intensifying attacks on Middle Eastern vessels. If exports normalise, Goldman expects prices moving towards $80. The bank’s Daan Struyven said shipping risks now matter more. He noted recent attacks could signal broader disruption ahead. IG analyst Tony Sycamore flagged a similar path towards March’s near-$120 high. That could hinge on Oman talks or a quicker pipeline restart.
JPMorgan Calculates Disruption Premium
JPMorgan estimates each extra disruption month could add $7-$8 to Brent. A three-month disruption could push average monthly Brent near $114. That figure reflects a scenario, not today’s spot price.
Citi Raises Brent Forecast
Citi lifted its third-quarter average Brent forecast to $86. Its previous forecast stood at $80. The bank cited a longer Strait of Hormuz reopening timeline. Citi’s figure is a quarterly average, separate from Monday’s spot levels.
Outlook Hinges on Exports and Shipping
Middle East escalation, Hormuz risks and the Saudi pipeline outage remain intertwined. Analyst scenarios diverge widely depending on how disruptions evolve. Goldman, JPMorgan and Citi all point to shipping and export normalisation as the key variable. Physical supply conditions, more than headlines alone, will likely shape where oil prices head next.
