Oil surpassed the US$80 a barrel mark overnight as tensions in the Middle East continued to loom alongside the threat of supply disruptions in the US Gulf of Mexico.
Benchmark Brent crude climbed as high as US$81.09 on Monday evening, before ending the day at US$81.01 for a 4.3% gain.
This meant the benchmark had hit its highest level since August, with fears over a return strike by Israel against Iran after last week’s missile attack buoying the price.
Threatening to hit Iranian oil facilities, Price Futures Group analysts warned a hit could leave a supply deficit after US reserves have become depleted.
“Given the rising tensions and the lack of visibility on how the complex geopolitical situation could resolve, oil prices have further room to run toward the upside,” Swissquote Bank’s Ipek Ozkardeskaya added.
“In the long run, regardless of how messy the Middle East picture gets, oil prices will end up giving back the geopolitically-led gains, but the severity of the conflict could prolong the correction timeline.”
Concerns that supply from the US Gulf of Mexico could be affected by Hurricane Milton also weighed, with the storm expected to make landfall on Wednesday.
Brent scaled back slightly on Tuesday to US$79.42 a barrel.