Iran Fires on UAE, Oil Surges Past $114 as Hormuz Crisis Deepens
CNBC reported Monday that oil prices spiked sharply after the United Arab Emirates disclosed it had come under direct missile attack from Iran, marking the most serious military escalation in the Persian Gulf in weeks.
International benchmark Brent crude climbed more than 5% to $114.30 a barrel by late morning in New York. U.S. West Texas Intermediate also advanced, gaining over 3% to reach $105.63 a barrel.
Iran Launches Missiles Toward the UAE
The UAE’s Defense Ministry said Iran fired four cruise missiles at the country. Air defenses successfully neutralized three of them over UAE territorial waters. The fourth fell harmlessly into the sea before reaching land.
The strike follows a string of attacks on commercial shipping in and around the strait. A tanker north of Fujairah took projectile hits over the weekend, while a bulk carrier was targeted by multiple small vessels off Iran’s coast, according to the UK’s Maritime Trade Operations Centre.
Iran’s forces also targeted an ADNOC-affiliated vessel, prompting Abu Dhabi to condemn the attacks as outright piracy.
U.S. Launches Project Freedom
President Donald Trump announced Sunday that the U.S. military would begin shepherding civilian vessels through the strait. The operation, called Project Freedom, involves guided-missile destroyers, more than 100 aircraft, and unmanned platforms, U.S. Central Command confirmed.
The scope of the mission remains contested. Axios reported that U.S. officials have ruled out full naval escorts for now. Instead, the Navy is advising ships on mine avoidance and is authorized to neutralize immediate threats to transiting vessels.
Iran’s military responded by warning it would target any U.S. warship approaching the strait. CENTCOM flatly denied Iranian state media claims that Revolutionary Guard forces struck a U.S. warship with two missiles. Two American-flagged merchant ships have already transited the strait successfully, the command said.
Background: The Biggest Supply Disruption in History
Iran’s weeks-long blockade of the Strait of Hormuz has triggered what analysts are calling the largest oil supply shock on record. Roughly 20% of global crude passes through the narrow waterway each day.
Exxon Mobil CEO Darren Woods warned Friday that markets have not yet priced in the full damage. Speaking on Exxon’s first-quarter earnings call, Woods said further price increases are likely if the strait stays closed.
Separately, OPEC+ agreed to a modest output increase of 188,000 barrels per day at its first meeting since the UAE’s departure from the cartel. Analysts at Moody’s Analytics have cautioned that oil sustained above $125 a barrel risks tipping the global economy into recession.
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