-- Crude oil prices rose Monday as Iran fired missiles and drones at the United Arab Emirates, reigniting concerns about an already fragile ceasefire that had paused hostilities in the region.
Brent advanced 4.6% to $113.15 per barrel, having hit $115.30 earlier in the day. West Texas Intermediate crude futures were last up 2.9% at $104.92.
The UAE intercepted three missiles launched by Iran, while a fourth fell into the sea, the former's Defense Ministry said in a post on X.
"The UAE's air defenses are currently dealing with missile attacks and incoming drones from Iran, and the Ministry of Defense confirms that the sounds heard in various parts of the country are the result of the UAE's air defense systems intercepting ballistic missiles, cruise missiles, and drones," it separately said in a more recent post.
The UAE's foreign ministry earlier reported that Iran attacked a tanker affiliated with ADNOC, its state-owned oil company, in the Strait of Hormuz.
The broader conflict paused following two separate ceasefires; one between Washington and Tehran and the other involving Israel and Lebanon. However, a framework for a permanent truce is yet to be reached.
The US military destroyed six Iranian boats in the Strait of Hormuz on Monday after Tehran attacked US Navy ships and commercial vessels, CNN reported, citing Admiral Brad Cooper, the head of the US Central Command.
Two US-flagged vessels passed through the strait, the Central Command said Monday, denying claims from Iran that a US ship had been hit. Iran's Islamic Revolutionary Guard Corps, however, said no commercial vessels or oil tankers had transited the narrow waterway, CNN reported.
Meanwhile, the Israeli military reportedly issued an evacuation order for 10 villages in southern Lebanon.
The cumulative supply disruption due to the conflict has now reached an estimated 600 million barrels by early May, Wells Fargo Investment Institute said in a note.
"Absent a reopening of the strait within the next several weeks, the global oil market, in our view, is likely to enter a period of explicit demand rationing within the current quarter," Wells Fargo Investment Institute Chief Investment Officer Darrell Cronk said. "Rationing on the order of four million to five million barrels per day would be required within weeks to rebalance the system, with a typical 30-day lag before flow disruptions fully translate into end-market shortages."