Oil prices rose for another session on Tuesday, reaching three-month highs as escalating tensions across the Gulf renewed concerns over regional energy flows.
That’s what Paolo Broccardo, CEO at BankPro, said in a market analysis sent to Rigzone on Tuesday, adding that the latest incidents affected several energy facilities in Saudi Arabia, “reviving production capacity disruption risks”.
“The deteriorating security landscape could hinder efforts to return energy exports to normal levels,” Broccardo warned.
“At the same time, ongoing disruptions in the Strait of Hormuz continue to reinforce the bullish backdrop for crude prices, with fewer cargoes leaving the region, according to Reuters,” he added.
“Nevertheless, efforts to sustain tanker crossings through the waterway despite the current restrictions and security risks, in addition to exports through alternative routes, could help limit the extent of the rise in oil prices,” he continued.
Broccardo noted in the analysis that another factor driving up energy prices is the heightened focus on the EU gas market, which, he said, “with no prospect of a stabilization in supplies from the Middle East, is filling its gas storage facilities ahead of winter at the highest prices seen in the last four years, having fallen furthest behind the norm in recent years”.
Looking ahead, Broccardo said crude prices are likely to remain highly sensitive to geopolitical developments and shipping conditions in the Straits of Hormuz and Bab El-Mandeb.
“Any improvement in transit conditions could ease supply concerns and weigh on prices, while a hardened stance or further restrictions would tighten the physical market and renew upward pressure on crude,” he noted.
Prices Remain Elevated
In another market analysis sent to Rigzone on Tuesday, Naeem Aslam, CIO at Zaye Capital Markets, outlined that oil prices remained elevated because the oil market is balancing a large geopolitical supply premium against signs that global demand could soften if tighter financial conditions persist.
“Middle East crude flows that were near 18 million barrels per day before the current conflict are now around 11 million barrels per day, while constrained traffic through the Strait of Hormuz and regional refining disruptions are tightening physical supply,” Aslam said in the analysis.
“That is why crude has remained close to six-week highs even though traders are still reluctant to push Brent decisively above U.S. $100,” he added.
Aslam outlined in the analysis that U.S. President Donald Trump’s comments were influencing oil market sentiment “because they frame a very different post-conflict oil scenario”.
“His statement that oil prices will “DROP PRECIPITOUSLY” once the Iran conflict is won, together with his expectation for gasoline eventually below U.S. $2 per gallon, points to the possibility that a large part of today’s price is geopolitical rather than structural,” he said.
“For now, however, the market is trading the immediate risk of disrupted Gulf supply rather than the promised outcome after de-escalation,” he added.
“OPEC+ has kept its October production policy unchanged, limiting the size of an immediate supply response, while the IEA estimates global oil supply could fall by 4.3 million barrels per day in 2026 to around 102 million barrels per day as Middle East and Russian losses outweigh additional output elsewhere,” he continued.
“At the same time, the IEA expects global demand to decline by 1.6 million barrels per day this year, explaining why oil is supported but still struggling to maintain a sustained move above U.S. $100,” he went on to note.
Aslam said yesterday’s U.S. economic data added “another two-sided force”.
“August non-farm payrolls rose by 162,000 against expectations near 55,000, while the unemployment rate held at 4.1 percent,” he pointed out.
“A stronger labor market normally supports transport demand, industrial activity and consumer fuel consumption, which is positive for crude,” he said.
“But the same report also strengthened expectations that interest rates may remain restrictive for longer, pushing Treasury yields higher and potentially supporting the U.S. dollar,” he added.
“A stronger dollar can pressure oil because crude is priced in dollars globally, while tighter policy can eventually slow economic activity and weaken demand. This is why strong employment data can support oil through the demand channel while simultaneously limiting the upside through rates and currency markets,” he continued.
Dated Brent, Oman Crude ‘Showing the Way Higher’
In a report sent to Rigzone today, Bjarne Schieldrop, Chief Commodities Analyst at Skandinaviska Enskilda Banken AB (SEB), said Dated Brent and Oman crude “are showing the way higher”.
“The Brent crude M1 contract (October) gained another 0.75 percent yesterday. It traded in a range of $95.97-95.06 per barrel and closed at $97.0 per barrel,” he pointed out.
“This morning it gains another 1.4 percent to $98.4 per barrel,” he added.
“The Dubai M1 contract which is settled in November is showing the way at $105 per barrel while Dated Brent settled yesterday at $106.8 per barrel,” he continued.
“Brent crude M1 is now well above both the 50dma, 100dma, and 200dma and is heading towards the 61.8 percent Fibo level of $100.55 per barrel with $110.44 per barrel next in line technical level thereafter,” he went on to state.
In this report, Schieldrop noted that tight oil product markets are helping to drive crude oil prices higher.
Schieldrop highlighted “the strong push upwards for the Dated Brent price”, adding that, “behind that drive upwards” were “very tight oil product markets with balance of month diesel refining margins in ARA now close to $90 per barrel and gasoil cracks have been reported to top $100 per barrel for the first time ever”.
“That means extreme profitability for refineries,” Schieldrop said.
“In response, refineries here, there, and everywhere want to get their hands on physical crude as quickly as possible, convert it to oil products, and sell the products into the ultra-tight spot oil product markets,” he added.
“This drive by refineries to process more crude in response to high refining margins, usually kicks in at much lower levels, thereby normally transferring tightness from the oil product market over to the crude oil market,” he continued.
“That normal mechanism hasn’t really worked properly in this crisis so far since there hasn’t been all that much spare refining capacity left,” he warned.
Not a Quiet Labor Day
In an exclusive interview with Rigzone on Tuesday, Phil Flynn, a Senior Market Analyst at the PRICE Futures Group, outlined that it was “not a quiet Labor Day” for the oil industry and sad the market “reacted to continued headlines and clashes between the U.S. and Iran”.
Flynn told Rigzone that an “attack on … Saudi Arabian refiners sent crack spreads soaring and put the Brent crude within a hair’s breadth of $100 a barrel”.
“The level of tension rising and the continued concern about the tightness in diesel supplies is keeping the market on edge,” Flynn warned.
Looking at the “positive side”, Flynn highlighted to Rigzone that there seemed to be some discussions between Russia and Ukraine.
To contact the author, email
