Oil Price Today (October 21): Crude oil crosses $110 amid Middle East supply concerns. What lies ahead?

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Brent crude futures jumped more than $1 to trade at around $110 per barrel. WTI Crude futures also gained more than a dollar to trade at around $99 per barrel

A supertanker caught fire after striking a sea mine in the south of Strait of Hormuz while "violating" Iranian regulations, Iran's Revolutionary Guards Navy said on Tuesday, as quoted by the Iranian media. There were at least 18 vessel attacks reported over two weeks, shiptracker Kpler said in a note on Monday.

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Attacks on tankers have now expanded beyond the Strait of Hormuz, Reuters quoted LSEG analysts as saying in a note. "Iran has been targeting vessels as far south as the Gulf of Oman, threatening loadings outside of the Arab Gulf, as well as the ship-to-ship transfers that have helped to support Middle East loadings as the conflict has dragged on."

The Houthis have claimed responsibility for attacks on a Saudi Aramco site in Yanbu, the Shaybah oilfield and Saudi Arabia's Riyadh and Abha airports. The death toll from a Houthi attack on Yemeni government forces on Monday jumped to 73 as fighting intensified.

Notably, the rise in oil prices today comes after prices fell yesterday following Iran's president discussing mediation efforts in a meeting with Pakistan's army chief in Tehran. Iranian Foreign Minister Abbas Araqchi said in a television interview on Tuesday that Iran has not received a response from Saudi Arabia or Yemen's Houthis to its offer to help broker peace talks.

What lies ahead for oil prices?

JPMorgan analysts said the outcome of the Middle East conflict remained difficult to assess, noting that there was uncertainty over how the situation could develop. When the war began, the bank had assumed that there were economic thresholds the US administration would not cross. Six months into the conflict, JPMorgan said several of those thresholds had been crossed, while there was still no clear exit strategy.

The risk of further supply disruptions has also increased the possibility of higher oil prices. Daan Struyven, co-head of global commodities research at Goldman Sachs, said recent attacks had shown that disruptions to shipping could spread and become more severe.

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Goldman Sachs has outlined a scenario in which oil prices could rise to as much as $120 a barrel if attacks on vessels in the Middle East intensify. If exports return to normal, the bank expects oil prices to move back towards $80 a barrel.