Oil Prices Climb, Brent Tops $114 after Iran Attacks UAE
Crude oil prices edged higher during trading hours on Tuesday as rising US-Iran tensions in the Strait of Hormuz fueled market uncertainty.
The UAE said an Iranian drone and missile attack had caused a fire at a refinery in the emirate of Fujairah, which sent oil prices flying again as an already fragile ceasefire begins to crack.
Iran’s navy said it had prevented the entry of enemy warships into the Strait of Hormuz by issuing a “swift and decisive warning”, according to state TV.
The U.S. Central Command also reported an exchange of fire with an array of Iranian drones, missiles, and small boats. The news sent Brent crude above $114 per barrel.
Latest data from the global commodity market showed that Brent crude traded at $114.77 per barrel. US benchmark West Texas Intermediate also climbed to $106.25 per barrel.
US efforts to facilitate safe passage for neutral vessels through the Strait of Hormuz, coupled with Iran’s moves to assert greater control over the waterway, have driven the geopolitical risk premium in the region higher again.
Geopolitical tensions continued to underpin prices after US President Donald Trump warned that Iran would be “blown off the face of the Earth” if it targeted American vessels operating in the region, according to remarks cited by Fox News.
“I spoke with President Trump for 20 minutes about the situation with Iran. He talked about Project Freedom and the US efforts to guide vessels through the Strait of Hormuz, issuing a new warning to the Iranian regime saying if the Iranians try to target US ships in this area, they will be, quote, ‘blown off the face of the Earth,'” Fox News’ Trey Yingst said.
Earlier Monday, US Central Command (CENTCOM) said US Navy guided-missile destroyers are currently operating in the Gulf after transiting the Strait of Hormuz in support of “Project Freedom” to restore freedom of navigation for commercial shipping through the strait.
Trump said the Iranians are being “more malleable” than they were in the past. The president told Fox News that the US military buildup in the region is continuing.
“We have more weapons and ammunition at a much higher grade than we had before,” he was quoted as saying. Iran has warned US forces that they would be attacked if they entered the strait amid a fragile ceasefire between the two countries.
Meanwhile, reports said drones and missiles believed to have originated from Iran targeted the United Arab Emirates, sparking a fire in the oil industrial zone in Fujairah.
The developments have heightened tensions in the region and increased concerns over supply security around the Strait of Hormuz. Since April 13, the United States has enforced a naval blockade targeting Iranian maritime traffic in the Strait of Hormuz.
