Oil Surges After Iran Strikes Energy Facility in UAE’s Fujairah
Oil prices jumped after key energy infrastructure and tankers in the Middle East came under attack, marking a significant escalation in U.S.–Iran hostilities and raising fresh questions over the durability of the roughly four-week ceasefire.
Brent climbed sharply and settled above $114 a barrel after an Iranian drone strike sparked a fire at a major oil industrial zone in Fujairah. The UAE issued multiple missile alerts and said its air defenses were actively engaging incoming threats. Prices had already rallied earlier in the session after tankers linked to several nations reported coming under fire in the Strait of Hormuz.
The latest wave of incidents represents the most notable rise in tensions since the U.S. and Iran agreed to a fragile ceasefire in early April. Markets remain highly sensitive to Hormuz disruption risk, given that prolonged restrictions in the key shipping lane tighten supply and amplify concerns about higher energy costs weighing on global growth.
“The market is starting to face the reality that this won’t be a clean, linear path to reopening, but a much bumpier and more uncertain process,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Group. She added that expectations for the resumption of flows through Hormuz have been pushed back, while the biggest near-term risk is renewed targeting of energy infrastructure—particularly in the UAE.
Fujairah is a major hub for crude and refined fuels and has become even more important because it sits outside the Strait of Hormuz. However, Iran has moved to redefine its “control zone” in the strait, with semi-official Tasnim reporting the area now extends to south of Fujairah. The report prompted more vessels to divert, worsening concerns about a tightening global supply backdrop.
The U.S. has maintained a naval blockade of Iranian ports since mid-April, a key sticking point in efforts to bring Tehran back to the negotiating table and a factor constraining Iranian crude exports. The escalation came shortly after President Donald Trump said the U.S. military would attempt to restore transit through the strait and help stranded vessels exit the Persian Gulf, though shipping executives said clearer security assurances are needed, particularly around mines and protection from Iranian attacks.
U.S. Central Command said two American-flagged merchant ships successfully transited Hormuz as part of a broader effort to open a lane through the waterway, and said U.S. forces repelled drone and missile attacks in recent hours. WTI for June delivery settled at $106.42 a barrel in New York, while Brent for July settlement settled at $114.44 a barrel.
Source : Newsmaker.id
