Oil prices climbed sharply on Monday as tensions in the Middle East intensified, with Iran targeting the United Arab Emirates with missiles and Tehran warning it is strengthening its control over the Strait of Hormuz. Fresh attacks on Middle Eastern oil infrastructure and tankers signal a significant escalation in the conflict between the U.S. and Iran, prompting Brent crude futures to surge above $114 per barrel. The continued closure of the critical shipping route, the Strait of Hormuz, has cut off vital energy shipments to global markets and heightened concerns over demand disruption and impacts on worldwide economic growth. The UAE stated that its air defense systems are responding to missiles from Iran and reported a fire in the Fujairah oil industrial zone, marking one of the first assaults on energy infrastructure in nearly a month. Additionally, a tanker outside the Strait of Hormuz was struck by an Iranian drone. Iran said it fired warning shots toward U.S. naval vessels after they attempted to approach the Strait of Hormuz. This came after U.S. President Trump announced that American forces planned, starting Monday, to attempt to reopen the strategic waterway and assist stranded vessels in leaving the Persian Gulf. Several shipowners and a vessel manager indicated they need more specific details on how transit through the Strait of Hormuz can be safely resumed, along with assurances regarding key concerns such as mines and protection from Iranian attacks. They requested anonymity due to the sensitivity of the matter. Other reports mentioned attacks in the Strait of Hormuz targeting vessels linked to South Korea and the United States, although U.S. Central Command denied the latter. "Not many believe the strait will reopen soon," stated Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management Ltd., adding that the U.S. plan marks the first attempt to reopen the chokepoint by military means. "The market will be closely watching Iran's response." Meanwhile, U.S. Central Command reported that two U.S.-flagged commercial ships successfully transited the strait, adding that the military is actively working to restore commercial passage. At the end of February, five U.S.-flagged commercial vessels were in the Persian Gulf, but they had not broadcast automatic identification system signals for several weeks. Price updates: June WTI rose 3.60% to $105.61 per barrel. July Brent crude increased 5.35% to $113.96 per barrel. Over the weekend, OPEC+ agreed to a symbolic increase in production quotas for June, as the group sought to project a business-as-usual message following the UAE's withdrawal. In response, Abu Dhabi announced its own plan to boost output.
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