Oil prices experienced a rebound for the second consecutive session, driven by renewed concerns over global supplies following fresh attacks on tankers. Meanwhile, investors are reevaluating the implications of the ongoing US-Israel conflict with Iran. US President Donald Trump stated on Thursday that Iran would be unable to proceed with any actions regarding its nuclear program without the approval of Washington. He also stated that he would need to determine whether the United States should initiate additional measures against Tehran or acquiesce to the existing circumstances. Brent crude experienced an increase of 0.87 cents, reflecting a rise of 0.089%, reaching $99.20 per barrel. Meanwhile, West Texas Intermediate saw a 0.6% uptick, surpassing the $91 mark. Brent crude settled $3.67 higher in the previous session, gaining 3.88% to $98.29 per barrel, while US West Texas Intermediate crude rose $2.40, or 2.72%, to close at $90.52 per barrel. Trump’s comments followed a significant decline in both crude benchmarks, which fell over 8% to reach their lowest levels since August 31.
Attacks on tankers in the Gulf have persisted at a rate nearing historical highs, with a minimum of five vessels documenting incidents since Sunday, as reported by the UK Maritime Trade Operations. The frequency of attacks mirrored that of October, during which 35 vessels were targeted, marking the highest monthly total since the onset of the conflict. The conflict initiated by US President Donald Trump and Israel against Iran in February resulted in a significant increase in fuel prices, emerging as a primary concern for American voters. Trump’s Republican Party experienced a significant defeat in Tuesday’s midterm elections, as Democrats secured control of both chambers of the US Congress. The newly elected Congress, under Democratic control, is set to assume office in January. Despite the recent decline in crude prices, any further escalation in the conflict could push Brent crude into the $110-125 per barrel range, as reported. Meanwhile, Iran’s Foreign Minister Abbas Araqchi engaged in discussions regarding the latest advancements in diplomatic initiatives aimed at enhancing regional stability during separate telephone conversations with his Saudi and Qatari counterparts, as reported by the Iranian foreign ministry.
However, substantial disparities persist between Tehran and Washington. Iran is requesting that the United States remove its naval blockade of Iranian ports, alleviate sanctions, and unfreeze assets prior to the complete reopening of the Strait of Hormuz. Tensions have also escalated on another front of the conflict, as Saudi Arabia issued alerts on Thursday regarding potential threats to Yanbu, its Red Sea oil export hub. The warnings emerged as Yemen’s Iran-aligned The Houthis have persisted in their assaults on the kingdom. The Houthis subsequently asserted that they had aimed at King Fahd airport located in the Saudi city of Dammam, although Saudi officials had not promptly verified the occurrence of the attack. Goldman Sachs has elevated its projections for oil prices, attributing this adjustment to escalating risks associated with global supply chains. The investment bank cautioned that Brent crude may reach $140 per barrel by 2027 if oil production in the Gulf region continues to fall considerably short of its 2025 average. The bank has adjusted its December Brent crude forecast upward to $105 per barrel, an increase from the previous estimate of $90. Its forecast for US West Texas Intermediate crude was also increased to $94 per barrel from $81.
In an optimistic scenario, Brent crude may attain $140 per barrel and average approximately $130 in 2027, contingent upon Gulf oil production being 3.5 million barrels per day lower than its 2025 average, as reported by source. Goldman Sachs anticipates that oil markets will factor in an increased geopolitical risk premium, considering the potential for interruptions to Middle Eastern supplies, the historical length of significant supply shocks, and the difficulties associated with achieving a sustainable diplomatic resolution. Meanwhile, the prevailing uncertainty regarding the trajectory of the conflict persists, complicating the assessment of the oil price outlook. JPMorgan analysts indicated that forecasting the progression of the war continues to present significant challenges. At the onset of the conflict, the bank anticipated that the US administration would refrain from surpassing specific economic thresholds. However, seven months into the war, several of those thresholds had been breached, with no clear strategy emerging to bring the conflict to an end.
