Oil prices surged to $114 a barrel after Iranian missile and drone strikes on UAE infrastructure, prompting shippers to reroute around the Strait of Hormuz.
The flare‑up follows a fragile four‑week ceasefire between the United States and Iran that is now on the brink of collapse, as US Central Command reported a clash in the Persian Gulf that involved Iranian drones, missiles and small boats.
Brent crude jumped more than 5% to trade near $114 a barrel, while WTI crude climbed near $105. The conflict, which began on February 28, has already claimed over 5,500 lives. The UAE blamed an Iranian drone strike for a large fire at the Fujairah Oil Industrial Zone, and the Emirati Defense Ministry said three of four incoming cruise missiles were intercepted, with three people hospitalized and the state issuing its first missile alerts since the ceasefire began. Iran will only reopen the strait once the US lifts its naval blockade on Iranian ports.
President Donald Trump confirmed via Truth Social that the US had "shot down seven small boats" and said the situation "could lead to something very positive." Naftali Bennett, former Israeli prime minister, described the strikes as "a declaration of the renewal of Iran’s war against the allies of the United States and Israel." Fars news agency claimed Iran fired shots at US Navy ships, while Tasnim news agency announced Iran had redefined the control zone in the strait to regulate shipping traffic.
With the ceasefire faltering and shipping routes disrupted, energy companies may need to accelerate alternative routing and security measures, while the market remains sensitive to any further escalation that could widen the Strait of Hormuz.
