Oil prices hover around $110 as U.S.-Iran tensions simmer after UAE drone strike<\/p>\n
Oil prices rose on Monday as tensions between the U.S. and Iran remained high following a drone strike which targeted a nuclear power plant in the United Arab Emirates.<\/p>\n
U.S. President Donald Trump warned that the \u201cclock is ticking\u201d for Iran to accept a deal, as reports suggested that the U.S. and Israel are actively discussing more military operations against Tehran. Trump later said in an interview with Fortune that Tehran was \u201cdying to sign\u201d a peace deal.<\/p>\n
Brent oil futures for July, the global benchmark, rose 1% to $110.41 a barrel by 06:52 ET (10:52 GMT), while U.S. West Texas Intermediate crude futures gained 1.3% to $102.28 per barrel.<\/p>\n
On Sunday, drone strikes caused a fire near the Barakah nuclear plant in the UAE, although no direct damage was done to the main plant.<\/p>\n
The UAE blamed Iran or one of its proxies for the attack, calling it a \u201cdangerous escalation.\u201d Iran reportedly launched drone and missile strikes on the UAE earlier this month, as military tensions flared in the Middle East.<\/p>\n
Trump had warned last week that a U.S.-Iran ceasefire was on \u201cmassive life support,\u201d as attempts at negotiating a peace deal largely fell flat.<\/p>\n
Crucially, the Strait of Hormuz has remained closed, with both Iran and the U.S. carrying out blockades of the waterway. This kept oil shipments largely disrupted, fueling a jump in crude prices which have, in turn, exacerbated fears over a spike in inflation in countries around the world.<\/p>\n
A U.S.-China summit held last week yielded few new developments on Iran. Trump claimed that China had agreed to buy American oil, but it remained unclear whether a formal agreement had been signed.<\/p>\n
Fears of oil supply disruptions remained a major concern, as Hormuz\u2019s closure affected roughly 20% of the world\u2019s oil supply. Shipping data showed traffic through the strait remained at a fraction of pre-war levels.<\/p>\n
Adding to concerns over tighter oil markets, the U.S. let a sanctions waiver on Russian oil lapse over the weekend.<\/p>\n
The waiver had previously allowed countries to buy Russian seaborne oil, but will now force major oil importers, especially India, to seek new sources of crude.<\/p>\n
Russia-Ukraine war adds to oil uncertainty<\/p>\n
Separately, the Russia-Ukraine war raged on, also adding to concerns over disruptions in oil supplies.<\/p>\n
Ukrainian drone strikes battered Russia over the weekend, with Moscow seen retaliating with its own drone attacks early-Monday.<\/p>\n
Reuters reported Russia had struck a vessel headed for loading in a Ukrainian port.<\/p>\n
Ukraine was seen repeatedly targeting Russian energy and oil infrastructure in recent months\u2013 a trend that could greatly disrupt Moscow\u2019s oil production, as Kyiv seeks to shut off the country\u2019s main source of overseas revenue.<\/p>\n
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