Oil Price Today (July 23): Crude oil crosses $95 as US strikes enter 12th day. Why Goldman says $120 is possible?

Oil prices climbed 2% on Thursday to their highest level in over six weeks as the United States launched another round of strikes on Iran and Yemen's Houthis targeted oil tankers in the Red Sea.

Crude oil price on July 23

Brent crude futures rose $1.93, or 2%, to $96 a barrel, their highest level since June 8. The benchmark had ended the previous session more than $3 higher at $94.07, just below a six-week high. U.S. West Texas Intermediate crude gained $1.44, or 1.7%, to $88.27 after advancing nearly 3% on Wednesday.

The U.S. military said it had carried out its 12th straight night of attacks on Iran. The latest strikes came hours after U.S. President Donald Trump threatened to destroy an Iranian bridge or power plant every time Iran fires at a ship in the Strait of Hormuz, escalating tensions around the crucial oil transit route.

Iran's Revolutionary Guards said an oil tanker caught fire following an explosion while trying to pass through what they described as a mined route south of the Strait of Hormuz.

Also read: Houthis claim attacks on Saudi tankers in Red Sea, raising risk of new chokepoint in Iran war

Two other tankers, according to the Guards, turned back. The group said the strait remained under its control and was "completely closed" as long as U.S. military action continued. It also warned that tankers would not be allowed to enter or leave without coordination with Iran.

The conflict has also spread to another key shipping route. Iran-aligned Houthis have threatened to target vessels carrying Saudi oil through the Bab el-Mandeb Strait and announced a naval blockade of Saudi Arabia.

The Houthi threat to Saudi shipments through the Red Sea raises the risk of wider disruption to global energy supplies beyond the Gulf. An Iranian Revolutionary Guards spokesperson also warned shipping companies in a post on X that the southern route through the Strait of Hormuz had been mined.

What’s next?

Goldman Sachs has warned that Brent crude could rise to $120 a barrel if disruptions to traffic through the Strait of Hormuz, the world's most important oil transit route, persist. The bank's base case, however, is that tensions in the Middle East will eventually ease.

If the regional conflict subsides, Goldman Sachs expects Brent to average $80 a barrel in the fourth quarter and $75 next year. However, analysts said the risks to these forecasts remain "tilted to the upside", pointing to the possibility of disruptions to shipping through both the Strait of Hormuz and the Red Sea.

Read more: US will destroy ‘one bridge or power plant’ for every attack on ships in Strait of Hormuz, warns Trump

Oil markets have experienced renewed volatility this month, with Brent climbing back above $91 a barrel as fighting between the United States and Iran intensified and Iran-backed Houthi rebels in Yemen threatened to block Saudi oil shipments. The Red Sea has also become increasingly important for Persian Gulf crude cargoes affected by disruptions, helping them reach buyers.

Anindya Banerjee, Head of Commodity Research at Kotak Securities, said crude oil prices were once again reflecting geopolitical risks. "Any strike on major Gulf export infrastructure could force a retest of $95-100 and beyond," he said.

Banerjee said the market was now paying less attention to the military strikes themselves and focusing more on the declining chances of a diplomatic resolution. Tehran has introduced new conditions for resuming negotiations, he said, with every fresh development pushing back the return of normal tanker traffic through the Strait of Hormuz. Shipping activity through the waterway has already remained well below pre-war levels.

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