Oil rises as risks of prolonged Mideast conflict fan supply worries

SINGAPORE, Sept 8 (Reuters) - Oil prices extended gains on Tuesday as risks of a prolonged conflict in the Middle East grew after Iran threatened to retaliate against any new U.S. attacks on its assets, heightening worries over supply disruption.

Brent crude futures LCOc1 climbed 49 cents, or 0.5%, to $97.49 a barrel by 0400 GMT. U.S. West Texas Intermediate crude CLc1 was at $92.92 a barrel, up $1.44, or 1.6%.

Following Monday's Labor Day holiday in the U.S., WTI was playing catch-up to Brent, which absorbed the weekend's escalation a day earlier, said Suvro Sarkar, head of energy research at DBS Bank.

"Overall, we believe the recent uptick in hostilities between the U.S. and Iran has the potential to materially change markets' reading of oil price related risks not only for the rest of 2026, but well into 2027 now," he said.

Iran threatened the U.S. with "economic warfare" and said it had fired an advanced missile at U.S. warships, highlighting the risk of a wider escalation days after the two sides exchanged fresh strikes.