Oil climbs as Middle East conflict escalates and tankers come under attack

Brent crude futures rose 76 cents, or 0.73%, to $105.48 a barrel by 2304 GMT on Monday, while US West Texas Intermediate crude climbed 59 cents, or 0.64%, to $92.44 a barrel. The gains followed an escalation in the Middle East conflict and fresh attacks on tankers, which traders view as a threat to regional oil supply.

Yemen's Iran-backed Houthis claimed responsibility for a Saturday strike on Riyadh's international airport that killed 13 people and wounded more than 300, Reuters reported. Saudi authorities said people were injured in a further attack on the airport on Sunday. US President Donald Trump said on Saturday that Washington was considering joining Saudi strikes on the Houthis, part of a spillover from the wider war with Iran that the US and Israel launched in February.

Shipping in the region also came under pressure over the weekend. According to the United Kingdom Maritime Trade Operations, a tanker was struck by a drone near the Sohar anchorage in Oman, while another vessel was damaged by an unknown projectile while transiting the Strait of Hormuz. Additional tanker attacks in the strait have been reported this month, threatening to slow a recovery in Middle East crude exports seen in September.

Goldman Sachs raised its December Brent price forecast to $90 a barrel from $85 previously, in a note from analysts led by Daan Struyven. The bank estimated a risk premium of just over $20 a barrel and said its base case remains that continued adaptation of Middle East supply will eventually bring crude prices down, though renewed escalation poses significant net upside risk. It forecast WTI to average $81 in December 2026 and $73 in 2027, noting US crude looks unusually cheap versus Brent because of high US-Europe shipping costs.

Separately, Trump announced on Sunday that Ukraine and Russia had agreed to an energy ceasefire, following a Friday announcement of a diesel supply deal with Russia. In the Gulf of Mexico, energy majors Shell, Chevron and BP were working to redeploy personnel and restore production at their platforms after Hurricane Isaias made landfall early on Saturday.