Oil & Energy
US Oil Update: Crude Gains After Iran Attacks UAE, Disrupts Hormuz Shipping
Crude oil futures jumped in midday trading on Monday, supported by Iranian drone attacks on an UAE energy facility and commercial vessels in the Strait of Hormuz, a move that threatens to derail fragile ceasefire talks and further choke global energy supplies.Front-month West Texas Intermediate crude futures climbed by 3.24% to $105.19 per barrel, while Brent futures advanced by 5.15% to $113.71/bbl.On Monday, Iran attacked several commercial vessels in the Hormuz and reportedly hit Fujairah's VTTI oil terminal, which is jointly owned by IFM Global Infrastructure Fund, Vitol and Adnoc.Fujairah's Media Office said in a post on X that a large fire was caused at an oil industrial zone in the city after a drone attack from Iran. The UAE's Defense Ministry said on Monday that Iran had launched four cruise missiles at the country, three of which were successfully engaged by the country's air defenses.The US military reportedly destroyed six Iranian small boats and intercepted Iranian cruise missiles and drones fired by Tehran as Washington launched an operation to free up shipping via the Hormuz.However, in an X post on Monday, Trump said seven boats were shot down. "We've shot down seven small boats or, as they like to call them, "fast" boats. It's all they have left. Other than the South Korean Ship, there has been, at this moment, no damage going through the Strait," President Trump said in a post on Truth Social.Trump said on Sunday that the US military would try to restore transit via the Strait starting Monday and help stranded vessels exit the strategic waterway.Saxo Bank strategist Trump said the US would help guide ships through the strategic waterway, raising hopes that some disrupted flows could resume.Earlier, the UAE accused Iran of attacking a vessel affiliated with its state energy firm Adnoc as it attempted to transit the Strait. "The vessel was not carrying any cargo at the time of the incident," Adnoc Logistics & Services, a unit of Adnoc, said in a social media post.The attack on the UAE comes after Iran's Revolutionary Guards Navy issued a map it said was expanding the areas under Tehran's control near the Strait to include the UAE's ports of Fujairah and Khorfakkan, as well as the coast of the UAE's emirate of Umm Al Quwain.On the supply front, OPEC+ agreed on Sunday to increase oil output by 188,000 barrels per day at the cartel's first meeting since the loss of its key member, the UAE."This increase is unlikely to be realised, given that 55% of it is expected to come from Persian Gulf producers," ING strategists said, adding that this won't happen amid ongoing disruptions in the Strait.Sultan al Jaber, managing director and Group CEO at Adnoc, said the UAE's exit from OPEC gives it greater ability to accelerate investment and expand.