A jump in crude prices is raising the prospect of more pain at the pump for US drivers.Matthew Hatcher/AFP/Getty ImagesOil jumped as the latest US-Iran escalation revived fears of Middle East supply disruptions.US gasoline prices are on the cusp of $4 a gallon amid the summer driving season.Goldman warns attacks on tankers and Middle East infrastructure could send crude back above $100 a barrel.Oil prices jumped on Monday after the latest escalation in the US-Iran conflict deepened the breakdown of a fragile ceasefire, reviving fears of disruptions to Middle East oil supplies.The US resumed strikes against Iran earlier this month after an interim agreement unraveled as negotiations toward a broader settlement stalled."For the record, two-way US-Iran retaliatory strikes not only torpedo the interim truce deal but are a serious escalation — from a skirmish into a full-blown conflict," wrote Vishnu Varathan, the Asia Pacific head of macro strategy at Mizuho.The developments pushed US gasoline prices to the brink of $4 a gallon as oil prices jumped on concerns that fighting could disrupt oil flows through the Strait of Hormuz, the critical waterway that carries about a quarter of the world's seaborne oil trade.On Sunday, AAA's national average gas price stood at $3.998 a gallon.Benchmark international Brent crude futures gained as much as 4% in early trading before paring gains to trade about 2% higher near $90 a barrel late Sunday. US West Texas Intermediate also rose about 2% to around $84 a barrel.Brent crude topped $126 a barrel in late April before retreating as strategic stock releases and weaker demand eased market tightness. Prices fell further after the US and Iran announced an interim agreement intended to halt hostilities and reopen the Strait of Hormuz.Varathan said the market may still be underestimating the risks from the latest escalation, citing severe disruption to shipping through Hormuz, renewed sanctions on Iranian crude, and the threat of broader attacks on regional oil infrastructure.Higher shipping and insurance costs could make the delivered cost of oil $10 to $15 a barrel more expensive, he added.While prices could fall quickly if the escalation subsides, "more attacks on tankers and Middle East infrastructure could push prices back to the $100+ range," wrote Jan Hatzius, Goldman Sachs' chief economist, in a note published on Sunday.Goldman said it now sees more upside risk in its forecast for Brent to average $80 a barrel in the fourth quarter of 2026 and $75 in 2027.Read the original article on Business Insider
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