Oil Prices Surge to Two-Month High Amid Rising Middle East Supply Concerns

Global oil prices climbed to a two-month high on Wednesday as fears of further supply disruptions increased following continued military strikes between the United States and Iran.

Brent crude prices surpassed USD 92 a barrel, reaching levels last seen in early June, while West Texas Intermediate (WTI) crude rose to nearly USD 85 a barrel, marking its fourth consecutive session of gains.

The latest increase followed a sharp rise on Tuesday, when crude prices closed at a five-week high after US forces carried out strikes on targets in southern and western Iran. Iran subsequently launched attacks on US facilities in Bahrain, Kuwait, and Jordan.

The US military said its latest strikes began late Tuesday in the United States, corresponding to early Wednesday in Iran. The developments came shortly after Kuwait announced that its air defence systems were intercepting Iranian drones.

Ongoing exchanges of attacks have intensified concerns over global energy supplies. Additional pressure has come from Yemen’s Iran-aligned Houthi movement, which has threatened to target vessels transporting Saudi oil through the Bab el-Mandeb Strait and announced a naval blockade against Saudi Arabia.

The Bab el-Mandeb Strait, located at the southern entrance of the Red Sea, has become an increasingly important route for Saudi crude exports as traffic through the Strait of Hormuz has declined sharply following the breakdown of a ceasefire between the US and Iran earlier this month.

Oil Prices Could Rise Further

Investment bank Goldman Sachs has warned that Brent crude prices could rise to USD 120 a barrel if disruptions continue through the Strait of Hormuz, one of the world’s most critical oil shipping routes.

However, the bank’s base forecast assumes tensions in the Middle East will eventually ease, with Brent expected to average around USD 80 a barrel in the fourth quarter and USD 75 next year if regional tensions decline.

Analysts said risks remain tilted towards further price increases, citing the possibility of disruptions to shipping routes through both the Strait of Hormuz and the Red Sea.

Energy markets have experienced renewed volatility this month, with Brent prices moving above USD 91 a barrel as fighting between the US and Iran intensified and Houthi rebels threatened Saudi oil shipments.

Analysts noted that the market is increasingly reacting not only to military actions but also to declining hopes for diplomatic progress. Any disruption to major Gulf oil export infrastructure could push prices towards USD 95–100 a barrel or higher, according to market observers.

While a ceasefire could ease immediate pressure, analysts said oil prices are unlikely to fall below the USD 70-a-barrel range in the near term, with geopolitical risks continuing to influence global energy markets.