Global oil prices climbed on Tuesday as escalating tensions between the U.S. and Iran raised fresh concerns about prolonged disruption to crude supplies from the Middle East.

Brent crude futures rose 34 cents, or 0.35%, to $97.50 a barrel, while U.S. West Texas Intermediate (WTI) crude gained $1.15, or 1.26%, to $92.75. UAE Murban crude was trading 3.36% higher at $106.80 a barrel.

Strait of Hormuz fuels supply fears

Brent had already reached its highest level since July 24 as traders added a risk premium over growing risks surrounding the Strait of Hormuz, a crucial route for global oil shipments. Shipping activity through the waterway has also slowed following Iran's threats of retaliation against further U.S. attacks.

Iran has warned that energy infrastructure across the Gulf, including U.S. oil and gas interests, could face attacks. The warning followed weekend strikes involving U.S. and Iranian forces, with no clear diplomatic breakthrough in sight.

Goldman Sachs raises oil forecast

Analysts at ANZ said the escalation could keep Persian Gulf oil supplies constrained through the rest of 2026, with a full recovery potentially taking until late in the first or early in the second quarter of 2027.

Goldman Sachs has raised its December 2026 Brent and WTI forecasts by $5 to $85 and $80 a barrel respectively, while its 2027 forecasts stand at $80 and $75. The bank's projections assume Middle East shipping disruptions continue into 2027.