SynopsisBrent crude jumped 5% to around $88 a barrel, recovering after its biggest three-day decline since April 2020. The U.S. West Texas Intermediate (WTI) crude advanced $.67, or .47%, to $83.ETMarkets.comOil prices climbed 5% after three straight days of losses as fighting resumed in the Middle East, ending several days of relative calm and reviving concerns over potential disruptions to energy supplies. The move followed a report from the U.S. military that it had intercepted an Iranian "surprise attack" on its forces and responded with strikes against the Islamic Republic.Brent crude jumped 5% to around $88 a barrel, recovering after its biggest three-day decline since April 2020. The U.S. West Texas Intermediate (WTI) crude advanced $.67, or .47%, to $83.The escalation has once again put the Strait of Hormuz at the centre of investor attention. Any disruption to oil supplies could add to inflationary pressures just days before the Federal Reserve's rate decision on Wednesday. Markets are already facing uncertainty as investors pull back from technology stocks amid growing doubts over whether the huge spending on artificial intelligence will generate adequate returns.Also read: Oil crosses $100: A 'perfect hurricane' can trigger bigger shock soonOil prices have swung sharply during the U.S.-Israeli war in Iran, which has disrupted crude flows around the world, with the effective closure of the Strait of Hormuz adding to concerns. Earlier this week, U.S. President Donald Trump ended a two-week U.S. bombing campaign over the weekend and said on Fox News on Tuesday that there had been "good talks" with Iran. He also warned that the U.S. could carry out further strikes if negotiations fail. Iran, however, has rejected the suggestion that it is seeking to resume talks with Washington.Where are prices headed?The direction of oil prices will depend heavily on how long the disruption lasts. JPMorgan estimates that every additional month of supply disruption could add around $7 to $8 a barrel to Brent prices. A three-month disruption could push monthly average Brent prices to about $114 a barrel.Goldman Sachs has similarly warned that Brent could climb to $120 a barrel if shipping disruptions through the Strait of Hormuz, the world's most important oil transit route, continue. Its base case is still that tensions in the Middle East will eventually ease.Under that scenario, Goldman Sachs expects Brent to average $80 a barrel in the fourth quarter and $75 next year. However, the bank said the risks to those forecasts remain "tilted to the upside", pointing to the possibility that shipping disruptions could persist through both the Strait of Hormuz and the Red Sea.Anindya Banerjee, Head of Commodity Research at Kotak Securities, said geopolitical developments were once again driving crude oil prices. "Any strike on major Gulf export infrastructure could force a retest of $95-100 and beyond," he said.Read more: Indian refiners scout new crude sources as Gulf risks riseAccording to Banerjee, the market has shifted its focus from the military action itself to the declining chances of a diplomatic breakthrough. Tehran has set new conditions for restarting negotiations, he said, while successive developments have delayed the return of normal tanker traffic through the Strait of Hormuz. Shipping activity through the waterway remains well below pre-war levels.Even after Tuesday's steep fall, crude prices remain nearly 30% higher for the month. Tanker traffic through the Strait of Hormuz is still far below normal, keeping the underlying supply risk in place despite the easing of immediate price pressure.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)Read More News on(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price...moreless(You can now subscribe to our ETMarkets WhatsApp channel)Read More News on(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price...moreless