Global oil markets climbed to their highest levels in seven months as geopolitical tensions between the United States and Iran intensified, with analysts warning that crude prices could surge to between $90 and $100 per barrel if the standoff escalates.
Traders are closely watching the prospect of potential U.S. military action against Iran, even as a fresh round of indirect diplomatic talks is scheduled to take place in Geneva later this week.
Benchmarks Hover Near Multi-Month Highs
In early Tuesday trading, both major crude benchmarks remained elevated.
The U.S. benchmark, West Texas Intermediate (WTI), rose 0.26% to $66.48 per barrel as of 7:46 a.m. ET, while the international benchmark, Brent crude, edged up 0.10% to $71.56 per barrel.
Although prices softened slightly from earlier gains after signals from Tehran suggested a narrow possibility of diplomatic progress, the market continues to price in significant geopolitical risk.
War Risk Premium Builds
Energy analysts say the current rally reflects a mounting “war risk premium” as investors assess the probability of direct confrontation.
Fereidun Fesharaki, Chairman Emeritus at energy consultancy FGE NexantECA, told Bloomberg Television that oil prices in the $90–$100 range are “within reach” if tensions deteriorate further.
According to him, the diplomatic track appears fragile. He argued that the political realities facing Tehran may limit the chances of compromise, suggesting that negotiations could collapse.
Should talks fail and hostilities escalate, market participants fear potential disruptions to crude exports from the Middle East, particularly shipments passing through strategic chokepoints such as the Strait of Hormuz.
Broader Market Influences
Oil’s upward momentum has also been shaped by developments in the United States.
A recent U.S. Supreme Court ruling that struck down former President Donald Trump’s retaliatory tariff framework injected fresh uncertainty into global trade policy. That development briefly pushed investors toward traditional safe-haven assets such as gold, tempering crude’s gains.
However, with the Geneva talks approaching, traders appear more focused on geopolitical outcomes than trade policy.
Diplomatic Talks in Focus
The upcoming round of indirect discussions between Washington and Tehran is widely viewed as a critical moment in the crisis.
Market participants remain skeptical about a breakthrough. Analysts say the absence of meaningful progress could rapidly lift prices as risk-averse traders hedge against potential supply disruptions.
For now, oil remains supported near seven-month highs, with volatility expected to intensify as diplomatic developments unfold. The direction of prices in the coming days will likely hinge on whether tensions ease — or move closer to open confrontation.