Oil Climbs As Israel-Iran Tensions Mount — Goldman Sachs Warns Of $100 Per Barrel Risk

Oil prices ticked up on Monday as Israel and Iran struck each other and raised concerns over oil supply from the Middle East.

Brent crude futures rose 0.8% to $74.85 per barrel while U.S. West Texas Intermediate crude futures gained 0.9% to $71.93 per barrel, as of 1.31 am ET.

The price move followed a surge on Friday when Israel first struck Iran’s nuclear and other military infrastructure. Since then, the conflict has escalated with Israel and Iran both launching missiles and armed drones at each other.

According to reports from the Iranian state media, Israel struck two natural gas processing facilities in Iran on Saturday. At the same time, reports from Israel stated that Iran had struck an oil refinery at Haifa.

The attacks have raised concerns about the oil flow at the Strait of Hormuz, a pivotal passage for oil tankers.

According to a CNBC report, Iran is considering shutting down the crucial Strait, through which one-fifth of the world’s oil is transported daily.

Goldman Sachs analysts have reportedly said closing the Hormuz Strait could push oil prices above $100 per barrel.

Oil prices already surged about 13% on Friday, the single biggest one-day gain since the initial days of Russia’s invasion of Ukraine.

However, Reuters reported, citing analysts, that OPEC+ countries, including Russia and Saudi Arabia, have the spare oil capacity to offset any supply disruption from Iran, which produces more than 3% of the world’s oil output.

The United States Oil Fund (USO) has gained 4.4%, while ProShares Ultra Bloomberg Crude Oil (UCO) has fallen 7.5% in extended trading.

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