Oil surges 3% as Iranian strikes on UAE renew supply fears

Oil prices surged by about 3% on Tuesday after renewed Iranian attacks on the United Arab Emirates reignited concerns over global supply disruptions. Brent crude futures climbed $3.27, or 3.3%, to reach $103.48 per barrel, while U.S. West Texas Intermediate rose $3.14, or 3.4%, to $96.64 per barrel. The increases followed fresh strikes by Iran on critical infrastructure in the UAE, including the Shah gas field, where operations remain suspended, and the Fujairah port, where loading activities by state oil company ADNOC were halted.

The Strait of Hormuz, a vital chokepoint for roughly 20% of the world’s oil and liquefied natural gas trade, has been largely disrupted as tensions escalate. The closure has forced the UAE, OPEC’s third-largest producer, to slash its output by more than half. Fujairah, situated just outside the Strait of Hormuz, handles oil volumes equivalent to about 1% of global demand, and its disruption adds further strain to an already fragile supply chain.

Iran’s latest strikes targeted both the Shah gas field and Fujairah port, compounding existing concerns over the safety of shipping routes. The attacks come as the U.S.-Israeli conflict with Iran enters its third week, intensifying fears of broader regional instability. Several U.S. allies have declined President Trump’s call to deploy warships to escort vessels through the Strait of Hormuz, leaving the waterway effectively closed to much of the world’s energy trade.

Analysts warn that the risks of further escalation remain high, with minimal room for error. "It only takes one Iranian militia to fire a missile or plant a mine on a passing tanker to reignite the entire situation," said IG market analyst Tony Sycamore. The fragile balance of supply and demand in global energy markets now hangs in the balance, as the threat of prolonged disruptions looms over the world economy.

Based on reporting by Africanews.