Trump predicts oil below $2 a gallon after Iran war as crude nears $100

Oil prices extended gains on Tuesday as fears of a prolonged conflict in West Asia mounted after Iran threatened retaliation against any fresh US attacks on its assets, while US President Donald Trump predicted crude prices would eventually fall below $2 a gallon after the war with Iran ends.

"Oil prices will drop precipitously, like everything else is dropping (but more!), when we WIN the war with Iran. Three Dollars a gallon, but ultimately, below Two Dollars a gallon. It will all happen quickly, and Iran will never have a Nuclear Weapon. MAGA!" Trump said in a post on X.

Brent crude futures rose 34 cents, or 0.35%, to $97.34 a barrel by 0000 GMT. US West Texas Intermediate crude was at $92.63 a barrel, up $1.15, or 1.26%.

Brent had risen to its highest level since July 24 in the previous session as traders continued to price in a risk premium amid heightened tensions around the Strait of Hormuz.

Goldman Sachs meanwhile raised its Brent and WTI price forecasts by $5 to $85 and $80 a barrel, respectively, for December 2026.

For 2027, it raised the forecasts to $80 and $75, respectively.

Iran warned on Monday that energy infrastructure across the Gulf, including US oil and gas interests, was vulnerable.

The warning followed tit-for-tat strikes over the weekend, with no immediate sign of a diplomatic breakthrough.

Iranian state media reported that a ballistic missile with improved capabilities was part of a new military doctrine under which Tehran "will take action against any threat, even before it is carried out."

The report cited comments aired on state television by Mohsen Rezaei, head of Iran's Supreme National Security Council, who claimed the new missile capability had been tested against a US warship.

On Saturday, US forces struck three Iranian oil tankers, including one near Kharg Island, Iran's main oil export hub, according to US Central Command. The attacks came after strikes by Iran's Revolutionary Guards on US warships operating in the region.

The escalation has raised concerns among experts, who said the attacks marked a widening of the conflict at sea.

Until then, Iranian attacks had focused on commercial shipping during six months of war. The US said its warships had evaded the attacks.