Global oil prices climbed to their highest levels in nearly two weeks on Monday after a drone attack targeted a nuclear power facility in the United Arab Emirates (UAE), raising concerns over further instability in the Middle East and disruptions to energy supplies.
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Brent crude futures rose by $2.01, or 1.84%, to $111.27 per barrel in early trading after touching $112, their highest level since May 5. Meanwhile, US West Texas Intermediate crude gained $2.33, or 2.21%, to reach $107.75 per barrel after earlier climbing to $108.70, its strongest level since April 30.
The market rally came as efforts to secure a peace deal related to the ongoing Iran conflict appeared to stall. Investors remain concerned over risks to shipping routes and oil exports through the Strait of Hormuz, a vital corridor that handles nearly 20% of global oil trade.
Tensions escalated after Emirati officials confirmed a drone strike near the Barakah nuclear power plant. Authorities said an investigation was underway to determine the source of the attack, describing it as a serious threat to national security.
Saudi Arabia also reported intercepting three drones entering its airspace from Iraq, adding to fears that regional tensions could widen further and threaten energy infrastructure across the Gulf.
Analysts said the attacks signaled increasing risks to oil markets already shaken by weeks of geopolitical uncertainty.
Market strategist Tony Sycamore noted that renewed military action against Iran or its allies could trigger further proxy attacks targeting Gulf oil facilities and transport routes.
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Adding to supply concerns, the United States allowed a sanctions waiver on Russian seaborne oil purchases to expire over the weekend. The waiver had temporarily enabled some countries, including India, to continue purchasing Russian oil.
Investors are also closely watching reports that US President Donald Trump is expected to meet national security advisers to discuss military options regarding Iran. The latest developments have reinforced fears of tighter global supply, pushing oil markets higher amid uncertainty.