As hostilities in the Middle‑East flared up once more, crude oil prices extended gains. Market worries over a prolonged conflict and shipping disruptions have risen markedly. On Saturday, US military forces struck three Iranian oil tankers after Iran launched ballistic missiles at two US naval warships. Iran’s Foreign Ministry later issued a statement condemning the attacks on commercial vessels as “war crimes” and “economic warfare”.

David Morrison, Senior Market Analyst at Trade Nation, commented that this marks a clear major escalation with tensions climbing higher again. He pointed out that US Energy Secretary Chris Wright had stated a deal with Iran to block its nuclear‑weapon ambitions may have become impossible.

Tit‑for‑tat strikes over the weekend also lifted natural‑gas prices, which briefly hit record highs. Meanwhile, tensions between Washington and Tehran keep simmering. Mohammad Bagher Ghalibaf, Speaker of Iran’s Parliament, posted on X on Monday: “If you strike our assets, you will be struck.”

The remarks were a response to earlier comments by US Defense Secretary Pete Hegseth. Hegseth had said the United States would “destroy (and sink) ” Iranian oil tankers if Iran fired at US vessels. Market participants believe the parallel escalation of rhetoric and actions indicates rising energy‑shipping risks across the Middle‑East.

Goldman Sachs Lifts Oil‑Price Forecasts

On Monday, Goldman Sachs raised its December‑2026 price forecasts for Brent crude and WTI crude by USD 5 per barrel, to USD 85 and USD 80 respectively. Its 2027 forecasts were lifted to USD 80 and USD 75 per barrel.

The bank projects Middle‑East shipping disruptions will peRSIst into 2027, and output will only gradually recover in the second half of 2027. Goldman Sachs stated markets are increASIngly pricing in a protracted Middle‑East conflict, adding that tanker freight rates for crude from the PeRSIan Gulf to China for Q2‑2027 already reflect shipping disruptions extending into that period.

In terms of market transmission, further deterioration in Middle‑East conditions could push crude‑oil, natural‑gas and related shipping costs higher. Volatile energy prices may in turn shift inflation expectations and sentiment across risk assets. US President Trump posted domestically on Monday: “When we win the war against Iran, oil prices will drop sharply……”