Western Texas Intermediate (WTI), the US crude oil benchmark, surged by more than 3% on Monday, trading at $102.55 per barrel after rebounding from daily lows of $96.45, amid escalating tensions in the Middle East following Iranian attacks on the United Arab Emirates (UAE) and increased risks around the Strait of Hormuz [1]. The UAE confirmed a fire at Fujairah petroleum facilities caused by an Iranian drone attack, with its defense ministry reporting the interception of three missiles and a fourth falling into the sea [1]. In response to the attacks and ongoing supply concerns, the UAE announced its exit from the Organization of the Petroleum Exporting Countries (OPEC), stating it will produce oil as needed for global markets without restrictions, while maintaining cooperation with other producers [1].
Further heightening market anxiety, a US admiral reported that Iran targeted commercial and US military ships with cruise missiles, and the US eliminated six Iranian small boats attempting to interfere with commercial shipping [1]. Iranian media claimed an attack on a US ship, though Axios, citing a US official, denied any such incident occurred [1]. President Donald Trump’s comments about potentially resuming strikes on Iran if they "misbehave" have cast doubt on the possibility of a ceasefire [1]. Iran’s Revolutionary Guards Navy also revealed an expanded control zone near the Strait of Hormuz, including key UAE ports, intensifying fears of supply disruptions [1].
In addition to the Middle East developments, South Korea reported a fire and explosion on a vessel, and the UAE accused Iran of attacking an Abu Dhabi National Oil Company (ADNOC) vessel with drones in the Strait of Hormuz [1]. Over the weekend, US President Trump announced 'Operation Freedom', deploying the US Navy to secure commercial shipping in the Strait of Hormuz [1].
On the economic front, US Factory Orders rose by 1.5% month-over-month in March, exceeding the expected 0.5% increase and up from 0.3% in February [1]. From a technical perspective, WTI is described as neutral to upward biased, with bullish momentum indicated by the Relative Strength Index (RSI) and a bullish engulfing chart pattern, suggesting potential for further price gains if key resistance levels are breached [1].
CONCLUSION
The escalation of military tensions between Iran and the UAE, combined with the UAE's exit from OPEC and threats to the Strait of Hormuz, have driven oil prices sharply higher and raised concerns about global supply disruptions. Technical indicators and recent economic data point to continued bullish sentiment in the oil market, with traders closely watching for further developments in the region.