Iran Attacks UAE as Oil Surges Past $114

CNBC reported Monday that Iran launched cruise missiles at the United Arab Emirates, dramatically escalating Persian Gulf tensions and sending oil prices sharply higher.

Iran Fires Four Missiles at the UAE

Abu Dhabi’s Defense Ministry confirmed Iran fired four cruise missiles toward the country. Three were destroyed by air defense systems over UAE territorial waters. The fourth fell harmlessly into the sea. A separate Iranian drone strike ignited a fire at the UAE’s key oil facility in Fujairah, according to reporting from Reuters. Abu Dhabi condemned the attacks on commercial shipping as “acts of piracy.”

International benchmark Brent crude surged more than 5% to $114.23 per barrel by early afternoon in New York. U.S. West Texas Intermediate climbed over 3% to $105.46 per barrel. The moves reflect deepening anxiety over the world’s most critical oil chokepoint.

Also Read: OPEC+ Agrees Output Hike Amid Record Supply Disruption

Background: A Blockade Weeks in the Making

Iran has blocked the Strait of Hormuz for several weeks, triggering what analysts describe as the largest oil supply disruption in history. The standoff pushed the U.S. and Iran to the edge of open conflict after sustained naval harassment of commercial vessels. Multiple tankers and bulk carriers were struck or harassed near the strait over the weekend alone.

Exxon Mobil CEO Darren Woods told investors on Exxon’s first-quarter earnings call that markets have not yet priced in the full severity of the disruption. He warned additional price pressure is inevitable if the waterway remains shut.

Also Read: Exxon Warns Investors Oil Shock Is Not Yet Fully Priced In

U.S. Launches Project Freedom

President Donald Trump announced Sunday that the U.S. would escort civilian vessels through the strait. The Pentagon formally launched an operation called Project Freedom, backed by guided-missile destroyers, over 100 aircraft, and unmanned platforms. U.S. Central Command confirmed two American-flagged merchant ships completed the passage safely.

However, Axios reported the operation carries real limits. Officials indicated there are no plans for full naval convoy escorts at this stage. The Navy will instead advise ships on mine avoidance and stand ready to respond if a vessel comes under attack.

Iran’s military threatened to engage any U.S. warship entering the strait. CENTCOM flatly denied Iranian state media claims that Revolutionary Guard forces struck an American vessel. OPEC+ separately agreed to raise output by 188,000 barrels per day at its first meeting since the UAE’s departure from the cartel, though traders appeared unconvinced the move would cool prices.

Read Next: Moody’s Analytics Warns $125 Oil Could Tip the World Into Recession