Oil prices continued to rise on Monday amid indications that efforts to resolve the U.S.-Israeli conflict concerning Iran have encountered obstacles. This development follows an attack on a nuclear power plant in the United Arab Emirates, coinciding with expectations that U.S. President Donald Trump will deliberate on military strategies regarding Iran. Brent crude futures increased by $1.44, or 1.32%, reaching $110.70 a barrel by 2337, following a peak earlier in the session that marked the highest level since May 5.
U.S. West Texas Intermediate was at $107.26 a barrel, reflecting an increase of $1.84, or 1.75%, after reaching its highest level since May 4. Both contracts experienced an increase exceeding 7% last week, as expectations for a peace agreement aimed at resolving ship attacks and seizures in the Strait of Hormuz diminished. Last week’s discussions between Trump and Chinese President Xi Jinping concluded without any indication from the world’s leading oil importer that it would assist in resolving the conflict.
Drone attacks on the UAE and Saudi Arabia, coupled with rhetoric from the U.S. and Iran, have heightened concerns regarding a potential escalation in the conflict. Emirati officials indicated that they are probing the origin of the assault on the Barakah nuclear power plant, asserting that the UAE possesses the complete authority to respond to such “terrorist attacks.” Saudi Arabia intercepted three drones that entered from Iraqi airspace and issued a warning regarding the implementation of necessary operational measures to address any attempts to violate its sovereignty and security.
According to market analyst Tony Sycamore, these drone strikes serve as a clear warning; any renewed U.S. or Israeli military actions against Iran may provoke increased proxy assaults on Gulf energy resources and essential infrastructure by Iran or its regional affiliates. Trump is anticipated to convene with senior national security advisers on Tuesday to deliberate on potential military actions concerning Iran, as reported.