Oil prices extend gain for fourth day, stay beyond $85 amid Middle East chaos

Crude oil prices continued to inch higher for the fourth day straight, staying beyond the $85 per barrel mark, on Thursday. The hike comes as investors react to a fresh escalation in the conflict between the United States and Iran, with concerns mounting over the security of major global energy shipping routes.Around 7 am IST, Brent crude was trading at $85.48 a barrel by 0026 GMT, up 0.53%, while US West Texas Intermediate (WTI) crude rose 0.84%, to $80.27 a barrel. The two benchmarks had also posted gains of around 0.3% in the previous session and remained close to the one-month highs reached earlier this week.The latest advance came after the United States carried out strikes on Iran’s missile sites and coastal defence positions on Wednesday, following the reimposition of a naval blockade on Iranian ports. Meanwhile, Tehran called the situation an “existential war” with the United States and warned that it could cut off additional regional energy exports.The renewed hostilities have intensified worries over crude supplies moving through the Strait of Hormuz, a route that handled about one-fifth of global oil and liquefied natural gas trade before the conflict began. Fighting between the two countries resumed last week, disrupting a truce that had been reached in June after months of conflict.Analysts also pointed to the possibility of further disruption beyond the Gulf. They said Iran has indicated it could use its Houthi allies in Yemen to block the Bab el-Mandeb gateway into the Red Sea, raising concerns that another critical energy corridor could come under pressure.“With tensions in the Middle East flaring up again, buying is taking the lead,” Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment told Reuters.“While mediation efforts by neighbouring countries continue and the consensus view is that a full-scale war is unlikely, WTI could still rise to $85–$87 depending on how the conflict develops,” he said.Investment bank Goldman Sachs said Brent crude could rise above $110 during the fourth quarter if Gulf export flows continue to face delays. It added that prices could instead fall into the $60s by the end of the year if geopolitical tensions ease and oil production recovers more quickly than expected.The recent rise in crude prices is also affecting companies that rely heavily on fuel. United Airlines said it now expects nearly $6 billion in additional fuel costs this year compared with the estimate it made at the start of 2026, with higher oil prices weighing on its outlook for the third quarter and the full year.Even so, the Chicago-based airline increased the lower end of its annual profit forecast, saying stronger travel demand, higher ticket prices and capacity reductions were expected to cushion the impact of rising fuel expenses.Meanwhile, US crude stockpiles declined by 1.7 million barrels in the week to July 10, according to the US Energy Information Administration. Analysts had expected inventories to fall by 2.6 million barrels.Even as energy prices continue to rise once again, they are still lower than levels reached earlier during the conflict, when they touched $126 per barrel mark.