Oil Prices Surge as Iran Tensions Deepen and Gulf Attacks Raise Supply Fears

Oil prices climbed sharply on Monday as concerns over escalating conflict in the Middle East rattled energy markets, following a reported drone attack near the UAE’s Barakah nuclear power plant and growing uncertainty over efforts to contain the Iran crisis.

Brent crude futures rose $2.01, or 1.84 percent, to $111.27 a barrel by early trading, after briefly touching $112, the highest level since early May. US West Texas Intermediate crude gained $2.33, or 2.21 percent, to $107.75 a barrel after reaching $108.70, its strongest level since late April.

The gains added to last week’s rally, when both major oil benchmarks advanced more than seven percent amid fears that tensions surrounding the Strait of Hormuz could threaten global energy supplies. The waterway remains one of the world’s most critical oil shipping routes.

Market sentiment weakened further after ceasefire discussions linked to the Iran conflict appeared to stall. Investors also reacted to reports that US President Donald Trump is expected to meet senior national security advisers on Tuesday to consider possible military responses involving Iran.

The latest rise in prices followed renewed security incidents across the Gulf region. Emirati authorities confirmed that a drone strike sparked a fire near the Barakah nuclear power plant on Sunday. Officials said there were no injuries or radiation leaks and the facility continued operating normally.

Saudi Arabia also reported intercepting three drones that entered its airspace from Iraq, warning that it would take necessary measures to protect its sovereignty and security.

Analysts said the attacks highlighted the growing risks facing Gulf energy infrastructure.

“These drone strikes are a pointed warning,” said IG market analyst Tony Sycamore. “Renewed US or Israeli strikes on Iran could trigger more proxy attacks on Gulf energy and critical infrastructure.”

Last week’s discussions between Trump and Chinese President Xi Jinping ended without any major breakthrough on reducing regional tensions or ensuring safe passage through the Strait of Hormuz. China remains the world’s largest oil importer and a major buyer of Middle Eastern crude.

Additional pressure came after the Trump administration allowed a sanctions waiver on Russian seaborne oil purchases to expire over the weekend. The waiver had temporarily permitted several countries, including India, to continue limited imports of Russian crude.

Energy market analyst Vandana Hari said the combination of geopolitical tensions and tighter sanctions had increased fears of supply disruptions.

“Fears of renewed strikes on Iran have worsened supply concerns,” she said. “The expiration of the Russia sanctions waiver added to market anxiety.”

Traders are now closely watching developments in Washington and the Gulf, with investors bracing for further volatility in global oil markets.