Oil nears $111 after drone strike on UAE plant sparks fresh supply concerns – Firstpost

Global oil prices climbed for a third straight session on Monday, with Brent crude nearing $111 a barrel after a drone attack on a nuclear power plant in the United Arab Emirates heightened fears of fresh supply disruptions in West Asia.

Brent crude futures rose $1.46, or 1.34 per cent, to $110.72 a barrel in early Asian trade, while US West Texas Intermediate (WTI) crude gained $1.61, or 1.59 per cent, to $102.63 a barrel. The rally follows an almost 8 per cent jump in oil prices last week as geopolitical tensions intensified across the region.

Drone strike heightens market anxiety

The latest gains came after reports that a
UAE nuclear facility was targeted in a drone strike, raising concerns about the vulnerability of critical infrastructure in the Gulf and the possibility of wider disruption to global energy supplies.

Markets are increasingly focused on the risk to shipments through the Strait of Hormuz, the strategic waterway that handles nearly a fifth of the world’s oil trade. Tanker flows through the route have remained below normal levels despite ongoing diplomatic efforts to ease tensions.

The conflict involving the US, Israel and Iran has kept traders on edge, with little clarity emerging from negotiations aimed at ending weeks of hostilities.

Trump warns Iran as talks stall

US President Donald Trump indicated that Washington’s patience with Tehran was running out, issuing a warning on social media.

“For Iran,
the Clock is Ticking, and they better get moving, FAST, or there won’t be anything left of them. TIME IS OF THE ESSENCE!” Trump wrote on Sunday.

Iranian media reports suggested the US had laid down several conditions for a potential agreement, including the transfer of uranium linked to Iran’s nuclear programme to the US and restrictions on Tehran’s access to frozen overseas assets.

However, Iranian news agencies said Washington had offered “no tangible concessions”, pointing to a widening impasse in negotiations.

Trump reportedly met senior officials including Vice President JD Vance, Secretary of State Marco Rubio and CIA Director John Ratcliffe over the weekend to discuss the conflict and possible military options involving Iran.

Russian crude waiver expiry tightens market

Adding to bullish sentiment in crude markets, the Trump administration allowed a waiver for Russian crude sales to expire despite India seeking an extension.

The move is expected to tighten global supply availability further, particularly for Asian buyers that have relied heavily on discounted Russian crude since the Russia-Ukraine war reshaped global trade flows.

Analysts said the combination of geopolitical instability, constrained shipping activity and uncertainty over Russian oil supplies was creating a renewed risk premium in crude markets.

Volatility likely to persist

Energy traders are expected to remain highly sensitive to developments in West Asia, especially any escalation that threatens oil infrastructure or shipping lanes in the Gulf.

Since the ceasefire announced on April 8, Trump has repeatedly warned that the US could resume military action if negotiations with Iran fail to produce a breakthrough.

With diplomatic efforts showing little progress and supply concerns mounting, analysts said oil prices could remain elevated and volatile in the coming weeks.