Petroleum prices soared Monday following the weekend attack against Iran by the U.S. and Israel, but Wall Street analysts cautioned that the gains could be short-lived if disruptions to crude exports from the Mideast are temporary.

In addition, the analysts said the conflict should boost U.S. refining margins as exports of crude oil and refined product exports from the Persian Gulf decline. Distillate values should also rise on higher military demand and low U.S. stocks, they said.

Citigroup analysts on Sunday said they expect Brent crude will rise to between $80 and $90/bbl in the next week, under the investment bank's base case, which assumes only modest disruptions to oil tanker traffic through the Strait of Hormuz and increased risks to Mideast energy infrastructure.

Citi, however, said it believes oil prices could return to about $70/bbl on a de-escalation in the conflict before retreating to $62/bbl in the second half of 2026.

Goldman Sachs on Sunday projected that oil prices could rise by $15/bbl if the strait is closed for a month. The bank's estimate assumes no release of oil from the Strategic Petroleum Reserve and increased use of spare regional pipeline capacity.

Goldman said current oil flows through the strait appeared to be "significantly disrupted" because of extreme caution by shippers, oil producers and insurers.

Still, the bank said crude prices could quickly retreat, much like they did in June 2025 in the wake of U.S. and Israeli strikes on Iranian nuclear facilities after the market gained confidence that actual oil supply was unchanged.

ICE May Brent contracts on Monday were up by about $4 to $77/bbl and the NYMEX April West Texas Intermediate contract was more than $3 higher at about $70/bbl near midday Monday. At least two vessels transiting the Strait of Hormuz, including an U.S. sanctioned oil tanker, were attacked on Sunday.

The strait, a maritime chokepoint that connects the Persian Gulf with the Gulf of Oman and the Arabian Sea, is a supply route for about 20 million b/d, or one-fifth, of global oil and LNG production as well as about 4 million b/d of refined product exports.

T.D. Cowen in a Sunday note said the conflict should be bullish for U.S. refining cracks because of reduced refined product exports from the Mideast.

But it added that U.S. refiners more reliant on seaborne barrels are expected to face headwinds from tighter crude differentials and rising shipping and insurance costs.

Tudor, Pickering, Holt on Monday said the attack on Iran could boost global distillate demand because of higher military consumption and cautioned that refiners could face some lower overall fuel demand depending on how high prices rise.

Independent energy analyst Philip Verleger on Sunday said refiners have kept oil inventories low over concerns of weaker prices in what has been considered an oversupplied market. U.S. Mid Atlantic inventories, in particular, are very low and the region could be vulnerable to a possible demand squeeze later this year from data centers that require diesel for their backup generators.

Verleger said the physical distillate market is very sensitive to supply changes, adding that cash ULSD prices in the New York Harbor market cash could rise to $4/gal on supply "hoarding," from $2.70/gal on Friday.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

Reporting by Frank Tang, ftang@opisnet.com; Editing by Jeffrey Barber, jbarber@opisnet.com

(END) Dow Jones Newswires

March 02, 2026 13:49 ET (18:49 GMT)

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