Oil prices today (July 22): Crude oil crosses $90, hitting 2-month high as US strike enters 11th day. Experts say $120 is possible

Oil prices rose to a two-month high on Wednesday as concerns grew about further supply disruptions after US forces launched strikes on Iranian military targets for an 11th consecutive night, while Kuwait said it was dealing with strikes by Iranian drones.

Crude oil price on 22 July

Brent crude prices have crossed the $92 per barrel mark, a level last seen in early June. West Texas Intermediate (WTI), US crude is now trading near $85 a barrel, climbing for a fourth consecutive session.

The latest move followed a sharp rise in oil prices on Tuesday, when crude settled at a five-week high after US forces hit targets in southern and western Iran. Meanwhile, Iran attacked US facilities in Bahrain, Kuwait and Jordan.

The US military said its latest strikes began late Tuesday in the United States or early Wednesday morning in Iran. The attacks came shortly after Kuwait’s military said its air defense system was intercepting Iranian drones.

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The constant exchange of attacks has raised concerns over global energy supplies. Yemen’s Iran-linked Houthis have also added to those concerns by threatening to target ships carrying Saudi oil through the Bab al-Mandeb Strait and announcing a naval blockade of Saudi Arabia.

Bab al-Mandeb, located at the southern entrance to the Red Sea, has become an increasingly important route for Saudi crude exports as traffic through the Strait of Hormuz has fallen sharply since the collapse of a cease-fire between the US and Iran earlier this month.

A big jump in crude?

Goldman Sachs has warned that Brent crude could reach $120 a barrel if disruptions through the Strait of Hormuz, the world’s most important oil transit route, continue. His base case, however, assumes that tensions in the Middle East will eventually ease.

The Wall Street bank expects Brent crude to average $80 a barrel in the fourth quarter and $75 next year if tensions in the region ease. However, analysts said the risks to those forecasts remain “tilted to the upside”, citing the potential for shipping disruptions through the Strait of Hormuz and potentially the Red Sea.

Energy markets have seen fresh volatility this month, with Brent climbing back above $91 a barrel as the war between the US and Iran intensifies and Iran-backed Houthi rebels in Yemen threaten to block Saudi shipments. Red Sea routes have become increasingly important in helping Persian Gulf crude cargoes reach consumers affected by disruptions.

“There are no signs of a ceasefire again at this stage. But if a ceasefire is imposed immediately, we do not expect Brent oil prices to fall beyond $70 per barrel. It is likely to remain a lower support for the near term,” Pranav Mere, Senior Vice President, Currency & Commodities at JM Financial, told ETM.

Anindya Banerjee, head of commodity research at Kotak Securities, said crude oil has once again started reflecting geopolitical risks. “Any strike on key Gulf export infrastructure could force a retest of $95-100 and above,” he said.

Read more: Relief that crude has finally fallen? The real warning signs just started flashing elsewhere

Banerjee said the market is now reacting less to military strikes and more to the weakening prospects of diplomacy. Tehran has set new conditions for resuming talks, he said, adding that each fresh development delays the return of normal tanker traffic through the Strait of Hormuz, where movement already remains below pre-war levels.

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