Oil prices surged nearly 3% on Tuesday following renewed military actions by Iran against key energy infrastructure in the United Arab Emirates, intensifying concerns over global supply security.
Brent crude futures increased by $3.27, or 3.3%, to settle at $103.48 per barrel. U.S. West Texas Intermediate crude rose by $3.14, or 3.4%, to $96.64. The price jump was directly triggered by reports that Iran launched fresh strikes on the UAE’s Shah gas field, where operations have been suspended, and hit Fujairah port, halting loading activities by the state oil company ADNOC.
Fujairah, a critical oil terminal located just outside the Strait of Hormuz, handles volumes equivalent to approximately 1% of global oil demand. The port’s disruption compounds the pressure on supply chains already strained by the effective closure of the Strait itself.
The Strait of Hormuz remains a pivotal chokepoint, facilitating about 20% of the world’s oil and liquefied natural gas trade. Its operations have been severely disrupted for the past three weeks amid the ongoing conflict involving the U.S. and Israel against Iran. This prolonged interruption has forced the UAE, the third-largest producer within OPEC, to cut its oil output by more than half.
Analysts stress that the situation remains volatile. Tony Sycamore, an analyst at IG, noted the persistent threat of further escalation: “It only takes one Iranian militia to fire a missile or plant a mine on a passing tanker to reignite the entire situation.”
The convergence of direct attacks on UAE facilities, the continued blockade of the Strait of Hormuz, and the reduced production from a major OPEC exporter has sharply renewed market fears of a prolonged supply deficit. While diplomatic efforts to secure shipping corridors continue, the physical constraints on the flow of Middle Eastern oil are supporting higher price benchmarks. Market sensitivity to any further developments in the region is expected to remain high in the near term, as the integrity of this key transit route is fundamental to global energy stability.
