Brent crude ticked up closer to $100 per barrel today as hopes for peace in the Middle East continued to shrink amid renewed mutual threats between the United States and Iran.
At the time of writing, the international benchmark was trading at $97.66 per barrel, with West Texas Intermediate at $93.05 per barrel, after Iran issued a threat to the United States of “economic warfare” and said it had fired a new, advanced missile at U.S. warships.
Oil prices were also pushed higher by the latest attack on Saudi Arabia’s Jizan refinery, a frequent target for the Yemeni forces, with a daily capacity of 400,000 barrels of crude.
In further bullish news for oil, Iran said Monday it would set up a new shipping corridor in the Strait of Hormuz, suggesting tanker traffic in the waterway would become even more challenging than it already is.
“In recent days, Washington has received a clear warning from Iran’s new missiles. Economic warfare will be met by a maritime exclusion zone across the Persian Gulf to the blockade perimeter. The operational posture toward U.S. warships and bases has been fundamentally recalibrated,” the secretary of Iran’s Supreme National Security Council, Mohsen Rezaei, said, as quoted by Reuters.
The warning comes after an exchange of missile strikes on ships in the Persian Gulf, which reinforced the perception that the war is not ending anytime soon. Analysts are already beginning to forecast the crisis extending into 2027, revising their oil price forecasts.
“We don't expect a full return to pre-war throughput until late Q1 or early Q2 2027,” ANZ analyst Daniel Hynes said in a note, as quoted by Reuters. ING analysts, meanwhile, noted that speculators have increased their net long positions in Brent crude as the prospect of peace evaporates.
By Irina Slav for Oilprice.com
