As tensions between the United States and Iran escalate further, market fears of more disruptions to Middle East energy supplies have risen, lifting international oil prices on Wednesday. Brent crude briefly neared $100 per barrel.

The October contract for US benchmark West Texas Intermediate (WTI) crude rose 1.75% to settle at $94.66 per barrel. International benchmark Brent crude futures climbed 1.55% to $99.44 per barrel. The oil rally was mainly driven by geopolitical risks, with traders worrying that an escalation in the conflict will disrupt crude transportation and exports.

US-Iran Hostilities Flare Up Again

The US military destroyed five Iranian crude oil tankers on Tuesday in retaliation for Iran’s attempted attack on a US warship. US Central Command (Centcom) stated in a release that the US warship evaded the Iranian attack and no US personnel were injured in the incident.

This means confrontation between the US and Iran has entered a high-tension phase again after a brief de-escalation. Previously, military operations from both sides were suspended for roughly one month. Washington once shifted to applying economic pressure on Tehran, but strike operations resumed at the end of last month.

Goldman Sachs Warns Oil May Surge to $120

Daan Struyven, Co-Head of Global Commodities Research at Goldman Sachs, said that with shipping attacks intensifying, it is "entirely possible" for oil prices to climb above $120 per barrel.

In an interview on CNBC’s Squawk Box ASIa, he said Goldman Sachs’ base case still assumes PeRSIan Gulf exports will gradually recover, with oil producers adapting to disruptions via alternative shipping routes and eventual new pipeline capacity.

However, Struyven noted that the recent escalation has raised the probability of a more bullish scenario where exports fail to recover in the coming months. He said developments over the past few days show that as shipping attacks "intensify and broaden", the odds of Brent crude breaking above $120 are rising.

Market participants widely watch that if shipping safety in the Middle East continues to deteriorate, crude supply chains may face greater disruptions and oil price volatility may expand further. For energy markets, current prices are close to a key round-number threshold, and subsequent trends will heavily depend on whether the conflict spills over and the pace of export recovery.