Oil prices jumped Monday after Iran attacked the United Arab Emirates, jeopardizing a fragile ceasefire agreement between Tehran and Washington.
International reference Brent Crude futures rose more than 5% to $114.23 a barrel as of 1:08 p.m. ET. WE West Texas Intermediate futures rose more than 3% to $105.46 a barrel.
The UAE Ministry of Defense said in a statement social media post that Iran had launched four cruise missiles at the country. Three of the missiles were successfully fired by UAE air defenses over its territorial waters, the ministry said. The fourth missile fell into the sea, the statement said.
Fire breaks out at UAE oil hub Fujairah after drone attack by Iran, says a Reuters report.
The attack on the United Arab Emirates is the latest escalation in the Persian Gulf. The United States and Iran were on the brink of war again after a week-long standoff over the Strait of Hormuz.
American mission in HormuzPresident Donald Trump On Sunday, the United States would guide civilian ships through the strait. Iran has been blocking the sea lane for weeks now, triggering the largest oil supply disruption in history.
The American military operation, called Project freedomis supported by US guided-missile destroyers, more than 100 aircraft and unmanned platforms, US Central Command announced on Monday. But there was some confusion about how aggressive the U.S. military would be in the strait, with an Axios report indicating the operation would be limited.
American officials told Axios that there are currently no plans to establish full-fledged naval escorts. Instead, the U.S. Navy will advise ships on how to avoid mines and stand ready to respond if ships are attacked, according to the Axios report. A US official told Axios that the military had been authorized to issue immediate threats against ships passing through the strait.
The Iranian military warned on Monday that it would attack any US warship that approached the strait, according to Tasnim State News Agency. The American army denied Iranian media reports that the Revolutionary Guards hit an American warship with two missiles.
“No US Navy ships were hit,” CENTCOM said in a social media post. “US forces support Project Freedom and enforce naval blockade of Iranian ports.”
Two American-flagged merchant ships successfully crossed the straitCENTCOM said on Monday.
More ships attackedThe operation comes after several attacks on commercial ships in or near the strait over the weekend. An oil tanker was hit by projectiles north of Fujairah, United Arab Emirates, and a bulk carrier was attacked by several small boats off the coast of Iran, according to incident reports from the UK’s Maritime Trade Operations Centre.
The United Arab Emirates said on Monday that Iranian drones had targeted a ship affiliated with its national oil company ADNOC. He condemned Iranian attacks on commercial ships as “acts of piracy.”
Traders will also evaluate OPEC+ All right to an increase in oil production of 188,000 barrels per day, in the first meeting of the cartel since the departure of its key member, the United Arab Emirates.
Exxon Mobile CEO Darren Woods said Friday the market had not fully absorbed the impact of Iran’s blockade of the strait. He warned that even higher oil prices were likely to come.
“It’s obvious to most that when you look at the unprecedented disruption to global oil and natural gas supplies, the market has yet to see the full impact,” Woods told investors during Exxon’s first-quarter earnings conference call.
“There is more to come if the strait remains closed,” the CEO said.