Escalating tensions abroad could push oil prices to roughly $90 per barrel, according to one analyst.

Prices weren't too far from those levels on Monday, as Brent (BZ=F) hovered above $86 per barrel while West Texas Intermediate (CL=F) topped $82 per barrel.

"The biggest fear in the market is the biggest geopolitical tension that we’re seeing in the Middle East," Andy Lipow, president of Lipow Oil Associates, told Yahoo Finance on Monday.

Escalating tensions between Israel and Lebanon's Hezbollah militia, backed by Iran, have raised concerns that a cross-border conflict could eventually involve Tehran more directly. Iran is responsible for about 3 million barrels of oil production per day, or about 3% of the world's output.

"That’s the oil markets' concern because that could spread to interrupting supplies throughout the Persian Gulf region," said Lipow. "Between that as well as increasing demand from now through the end of the year, I’m expecting Brent crude oil prices to drift up to about $90 per barrel."

Rising demand has also lifted crude prices in recent weeks. Last month, US crude gained 6%.

"The latest strength in prices has been attributed to shrinking crude and product inventories with higher road traffic demand as well as jet travel," Dennis Kissler, senior vice president at BOK Financial, said in a recent note.

"Hotter temps thru most of the US has also been a demand positive for power generation," he added.

Wall Street widely predicts slowing demand amid greater supply will send prices lower next year, with JPMorgan analysts predicting Brent to average $75 in 2025, sharply down from $83 in 2024.

Goldman Sachs has kept its target for next year unchanged at an average of $82 per barrel.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

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