-- Crude oil futures advanced in after-hours trading on Monday, after the US military launched an operation to escort commercial vessels via the Strait of Hormuz, triggering a wave of Iranian missile and drone strikes against the UAE and vessels attempting to cross the waterway.
Front-month West Texas Intermediate crude futures gained by 3.14% to $105.14 per barrel, while Brent futures jumped by 5.46% to $114.08/bbl.
On Monday, the UAE's Defense Ministry said that Iran had launched 12 ballistic missiles, three cruise missiles, and four UAVs at the country. 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 drone attack reportedly hit Fujairah's VTTI oil terminal as Tehran steps up strikes in the vicinity of the Hormuz.
"Iran had no pre-planned intention to attack the Fujairah oil facilities. The incident resulted from US military adventurism to create an illegal passage through restricted areas of the Strait of Hormuz," a senior Iranian military official was quoted as saying in local media.
The escalation follows President Trump's announcement on Sunday that the US military would try to restore transit via the Hormuz starting Monday and help stranded vessels exit the strategic waterway.
US Central Command said on Monday that two American-flagged merchant vessels transited the Strait, adding that the military is actively working to restore commercial flow.
The US military also 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.
"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.
However, the Revolutionary Guards said that no commercial vessels or oil tankers have transited the Hormuz, dismissing the US claims as "baseless and outright false."
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.
Meanwhile, OPEC+ agreed on Sunday to increase oil output by 188,000 barrels per day at its first meeting since the loss of its key member, the UAE. Sultan al Jaber, managing director and Group CEO at Adnoc, said exit from OPEC gives it greater ability to accelerate investment and expand.
"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.