Oil markets whipsawed over the past two sessions, with Brent crude suffering its largest one-day drop in more than two months before rebounding as US-Iran tensions intensified. On Monday, front-month Brent futures fell $6.98, or 6.15%, to settle near $106.45, while West Texas Intermediate dropped 6.44% to $97.41 and broke below $100 for the first time since the October rally. The intraday range was especially volatile: Brent traded between $105.86 and $112.41, erasing roughly seven dollars from Friday’s $113.43 settlement.
The decline was concentrated at the front of the futures curve. January 2027 lost $6.98, while December 2027 shed only $2.41, and longer-dated contracts fell less than $1. According to analysts, that structure signals a withdrawal of a near-term war premium rather than a reassessment of long-term supply. Brent remains up 7.56% over one month, 24.29% over three months, and 43.42% year-to-date.
By Tuesday, prices attempted to recover. Brent rose to $105.22, above Monday’s low of $103.47, and WTI climbed to $97.10 from $95.00. The rebound followed reports that the United States launched limited strikes on Iran’s Qeshm Island, although Washington did not confirm the attacks. President Donald Trump is said to be weighing major strikes on Iranian targets, and analysts caution the outcome of US midterm elections may influence his decision-making.
Bank forecasts shifted sharply higher. Goldman Sachs lifted its December Brent target to $105 per barrel from $90, a nearly 17% increase, and raised its 2027 average forecast to $88 from $80. Goldman said its base case now includes a 1 million barrel per day global supply disruption allowance in 2027. ANZ raised its end-2026 call to $105, warning that eight months of adapting to disrupted Middle Eastern supply have weakened buffers. UBS sees Brent at $110 by year-end.
Iran has said it has a two-day plan to reopen the Strait of Hormuz and resume nuclear talks if Washington meets its demands, but no agreement has been reached. Tehran also warned it may attack Israel’s Dimona nuclear site and civil oil and gas infrastructure if the US strikes the Pickaxe Mountain facility. Former broadcaster Tucker Carlson warned Trump could consider a tactical nuclear weapon against that target, which would be the first such use since World War II.
Technical analysis shows Brent remains above its 50-day exponential moving average after rallying from $70.26 in July to a peak of $117 last week. The current pullback may have been a sharp liquidation, with the next upside level near $110 if risk premium returns.
