Oil prices increased for a fourth consecutive session on Wednesday, rising more than $1 in early trade following Iran’s new attacks on U.S. military assets in the Gulf, as the conflict between Washington and Tehran continued to escalate across the region. Iran’s Revolutionary Guards announced that they targeted two U.S. destroyers and what they referred to as a U.S. base located in Jordan’s Al Azraq with ballistic missiles. The attacks were executed as a response to U.S. strikes on Iranian oil tankers. Brent crude futures increased by $1.57, representing a 1.6% rise, reaching $99.49 per barrel, whereas U.S. West Texas Intermediate crude advanced by $1.60, or 1.72%, to $94.63 per barrel. Brent has increased by 25% since early August, as expectations for a lasting resolution to the six-month conflict have diminished and hostilities have escalated once more.

U.S. Secretary of State Marco Rubio said Washington would continue targeting Iranian oil tankers in response to attempted attacks on U.S. warships. “Iran continues to try to hit U.S. naval ships, and for every time they do that or try to do that, they’re going to lose tankers,” Rubio told. U.S. Central Command reported on Tuesday that its forces had successfully destroyed five Iranian crude oil carriers on September 8, subsequent to missile attacks aimed at a U.S. Navy warship in the preceding two days. Jordan’s air-defence systems successfully intercepted 18 out of the 20 ballistic missiles that were launched from Iranian territory. The remaining two missiles landed in unpopulated areas, as reported by the country’s state news agency, citing military sources. No casualties were reported. Goldman Sachs has cautioned that oil prices may escalate to $120 a barrel should attacks on shipping in the Middle East escalate, with the resurgence of hostilities heightening apprehensions regarding potential disruptions to crude supplies.

Daan Struyven stated in an interview that recent developments suggested that the risk of broader and more severe shipping disruptions had emerged as a significant concern. Struyven indicated that Goldman Sachs perceives “meaningful upside to crude oil prices,” while also recommending that investors consider positioning themselves for increased prices in natural gas and refined products. He stated that the supply shocks in petrol and fuels are more significant than those observed in the crude market. The duration of the disruption will be pivotal for the oil market. JPMorgan’s analysis suggests that each additional month of disruption may contribute approximately $7 to $8 per barrel increase in Brent prices. If the disruption persists for three months, the bank anticipates average monthly Brent prices to approximate $114 per barrel.

Citi has adjusted its average Brent crude price forecast for the third quarter to $86 a barrel, up from $80, citing a longer-than-anticipated timeline for the reopening of the Strait of Hormuz. Analysts have raised their short-term Brent forecast to $95 a barrel and cautioned that prices may increase further should the conflict in the Middle East intensify. It was indicated that a prolonged standoff characterised by calibrated military action between the U.S. and Iran seems to be the most probable scenario, which could potentially postpone the full resumption of Middle East supply.