An analyst said that the escalating geopolitical tensions could push oil prices up to around $90 per barrel.

On Tuesday, the oil price was not far from this level, with Brent hovering above $86 per barrel and WTI crude oil above $82.

Andy Lipow, president of Lipow Oil Associates, said on Monday, "The biggest concern in the market is the geopolitical tensions we see in the Middle East."

The escalating tensions between the Hezbollah militia supported by Israel and Iran and the Hezbollah militia supported by Iran in Lebanon have raised concerns that the conflict may ultimately lead to direct Iranian involvement. Iran produces about 3% of the world's daily oil output of about 30 million barrels.

A commodity strategy analyst at TD Securities also told clients in a report last Friday that oil market speculators have increased long positions, betting on rising prices, as the escalating tensions between the Hezbollah militia supported by Israel and Iran and the Hezbollah militia supported by Iran in Lebanon have been shown to be a major driving force behind the recent strong price trend. However, TD Securities added, "The rise in risk premiums will only support oil prices, not push them higher."

Lipow said, "This is a concern in the oil market, because the conflict could spread to the entire Persian Gulf region and lead to supply disruptions, based on this and increasing demand from now until the end of this year, I expect Brent crude oil prices to rise to around $90 per barrel."

In recent weeks, growing demand has also pushed up crude oil prices, with U.S. crude oil up 6% last month.

Dennis Kissler, senior vice president at BOK Financial, said in a recent report that the recent rise in oil prices is due to reduced crude oil and product inventories, increased highway traffic demand and jet travel demand.

He added, "The high temperatures in most parts of the United States have also spurred positive demand for electricity generation."

Moreover, Phil Flynn, senior market analyst at Price Futures Group, said that the weather in the Atlantic remains a concern, with hurricanes raging in the Caribbean. Bob Yawger, executive director of energy futures at Atlantic China Welding Consumables, Inc., said that if hurricanes hit refineries along the Gulf Coast, gasoline prices will rise, while as crude oil inventories pile up, oil prices will fall.

Wall Street widely expects that in the case of increasing supplies, slowing demand will lead to lower oil prices next year. JPMorgan analysts expect the average price of Brent crude oil to drop sharply from $83 in 2024 to $75 in 2025, while Goldman Sachs is keeping its oil price target for next year unchanged at an average of $82 per barrel.