Oil nears $100 as Gulf attacks raise price risks

Key takeaways:

Brent crude briefly reached $99.46 a barrel Tuesday before easing to $97.85, while U.S. crude rose more than 2.5% to nearly $94, according to the reports.
Goldman Sachs and HSBC analysts warned Brent could rise to around or above $120 if attacks intensify and oil flows through Hormuz remain low.
Americans spent an additional $100 billion on fuel between Feb. 28 and Sept. 8, with $55 billion from gasoline and $45 billion from diesel, according to a Brown University tracker cited by CBS News.

Oil prices climbed toward $100 a barrel Tuesday as attacks on Saudi energy assets and renewed fighting around key Middle East shipping routes intensified concerns that crude could surge as high as $120 if the conflict further disrupts supplies.

Brent crude, the international benchmark, briefly reached $99.46 a barrel before easing to $97.85, according to CBS News. NBC News reported that U.S. crude rose more than 2.5% to nearly $94 a barrel, while wholesale gasoline prices increased 1.4%. Brent has risen sharply from about $70 to $72 before and around the start of the war against Iran on Feb. 28, with the benchmark up 36% since the war began, according to NBC News, and up more than 62% since the start of the year.

The latest increase followed Saudi Arabia’s report of attacks on energy assets that temporarily paused operations. The state-run Saudi Press Agency said the attacks were carried out by the “terrorist” Houthis and said 73 civilians were injured. Saudi Arabia also condemned Houthi attacks on commercial vessels in the Red Sea and what it called threats to “freedom of international maritime navigation.”

The escalation came after the U.S. struck three Iranian oil tankers on Sunday, sinking one, NBC News reported. CBS News reported that U.S. military forces struck three Iranian oil tankers on Saturday. The strikes followed Iran’s launch of ballistic missiles toward U.S. Navy ships, according to NBC News.

Shipping remains constrained through the Strait of Hormuz, the strategic waterway that normally carries about a fifth, or more than 20%, of the world’s oil and energy supply. NBC News reported that only four ships passed through the strait Saturday and six on Sunday. Traffic through the Bab el Mandeb strait, between the Arabian Peninsula and northeastern Africa, fell 16% from the previous week, though more than 260 ships transited last week, according to MarineTraffic figures cited by NBC News.

Goldman Sachs analysts warned that more intense attacks in the Persian Gulf and Red Sea could push Brent above $120 a barrel. “We view more intense shipping attacks in Hormuz and the Red Sea as the most likely driver of this lower-output, higher-price scenario,” they wrote. HSBC analysts also said that “if diplomacy fails and Hormuz flows stay near current levels, inventories could draw toward operational lows and Brent could rise” to around $120, according to NBC News.

Goldman’s base case is less severe. The bank expects Brent to fall to $85 a barrel by the end of the year, with West Texas Intermediate, the U.S. benchmark, near $80, CBS News reported. HSBC’s base case is for Brent to hover around $95 through year-end, with forecasts revised higher to $85 for 2027 and $75 for 2028 and beyond.

Fuel costs are already weighing on consumers. Americans spent an additional $100 billion on fuel between Feb. 28 and Sept. 8, according to a Brown University tracker cited by CBS News. Higher gasoline prices accounted for about $55 billion, while diesel accounted for $45 billion. AAA data showed diesel at a record $5.90 a gallon over the Labor Day period and remaining there since the weekend, according to the reports.

The national average gasoline price was $4.15 a gallon Tuesday, unchanged from Monday but up 6 cents from a week earlier and 14 cents from a month earlier, NBC News reported. AAA’s national average gas price has risen 40% since the war began.

“This is the time of year that most Americans see gas prices going down as demand falls and we soon change to winter gasoline, but as of late, we’ve been seeing a lot more ups — especially for diesel — the fuel that drives the U.S. economy, and that may continue,” GasBuddy petroleum analyst Patrick De Haan wrote Sept. 7.

The Trump administration has said prices should fall when the conflict ends. Treasury Secretary Scott Bessent told Fox News on Sunday that the energy supply shock “is going to end,” adding, “On the other side of this, we actually could see oil prices at $40 or $50 [a barrel] because there’s so much supply coming on.” President Donald Trump wrote Monday that “oil prices will drop precipitously” if the U.S. wins the war with Iran and claimed gasoline could fall as low as “two dollars a gallon,” NBC News reported.

Goldman said markets are increasingly bracing for a prolonged conflict. Options now imply a 25% probability that Brent will remain above $100 in March 2027, up from 6% a month ago, CBS News reported.