Oil Prices Jump 6% As Iran Sets UAE Oil Port Ablaze, Strikes Vessels In Strait Of Hormuz
NEW YORK, May 4 (Reuters) – Oil prices rose nearly 6 percent on Monday after Iran stepped up attacks on ships in the United Arab Emirates and the Middle East Gulf over the past 24 hours; this was the most significant increase since the US-Iran ceasefire went into effect in early April.
Brent futures rose $6.79, or 6.3%, to $114.96 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $4.23, or 4.2%, to $106.17 a barrel.
While Tehran showed its dominance over Middle Eastern oil after US President Donald Trump said his Navy would open the strait, an explosion occurred against a South Korean ship in the Strait of Hormuz on Monday, and Iranian unmanned aerial vehicles caused a fire at the UAE oil port.
The U.S. military destroyed six Iranian small boats and intercepted Iranian cruise missiles and drones fired by Tehran as the United States launched an operation to free shipping in the Strait of Hormuz, Central Command chief U.S. Admiral Brad Cooper said on Monday.
Meanwhile, Iranian military officials denied the claim that Iranian small boats were sunk.
Before the US and Israel launched an attack on Iran on February 28, approximately 20 percent of the global oil and liquefied natural gas supply was passing through the strait.
According to Iranian news agencies, Iran’s Revolutionary Guard Navy has released a map in which it says it expands the areas controlled by Iran near the Strait of Hormuz to include the UAE ports of Fujairah and Khorfakkan, as well as the coast of the Emirate of Umm Al Quwain in the UAE.
“As long as the flow through the Bosphorus remains limited, the path of prices will continue to be upward,” UBS analyst Giovanni Staunovo said.
Earlier in the day, the US military said two US merchant ships passed through the strait, without specifying when. Iran has denied that any transit took place.
Iran Hit Other Ships Too
It is stated that Iran may have attacked four ships, including a South Korean ship, in the Gulf region in the last 24 hours.
Previously, the UAE accused Iran of using drones to attack an empty crude oil tanker belonging to Abu Dhabi state oil company ADNOC while it was trying to pass through the Bosphorus.
Meanwhile, UK Merchant Marine Operations (UKMTO) said it had received a report of an incident involving a cargo ship approximately 36 nautical miles north of Dubai.
UKMTO also reported a separate incident near the UAE earlier in the day. The energy minister of the UAE, which left OPEC last week, said the country owed it to its investment partners to produce what global oil markets need without restrictions while cooperating with other crude producers.
OPEC and its allies, known as OPEC+, said they would raise oil production targets for seven members by 188,000 barrels per day in June, marking the third consecutive monthly increase.
(Reporting by Scott DiSavino in New York and Ahmad Ghaddar in London; Additional reporting by Florence Tan and Sudarshan Varadhan; Editing by Louise Heavens, Bernadette Baum, Paul Simao, Will Dunham, Alexander Smith and Deepa Babington)
