Crude oil prices climbed sharply on Monday as investors reacted to rising geopolitical tensions in the Middle East following a drone strike near a nuclear facility in the United Arab Emirates.
Market sentiment remained supported by fears of further disruption to global oil supplies, particularly as tensions between the United States and Iran continued to intensify. Traders also closely monitored developments surrounding the Strait of Hormuz, a critical route for global energy shipments.
Brent crude futures for July delivery rose 1.80% to US$111.23 per barrel during early trade. The benchmark touched an intraday high of US$111.99 after opening near US$110.13.
Meanwhile, US West Texas Intermediate (WTI) crude futures for July advanced 2.27% to US$103.31 per barrel. WTI traded within a day’s range of US$101.64 to US$104.36.
Oil markets reacted strongly after drone strikes caused a fire near the Barakah nuclear plant in the UAE on Sunday. Reports indicated that Iran and its regional proxies were likely responsible for the attack.
The incident added to already elevated tensions in the Middle East, where military activity has intensified in recent weeks, particularly around the Strait of Hormuz.
Iran had earlier launched drone and missile strikes targeting the UAE, further escalating regional instability and raising concerns over the security of critical energy infrastructure.
US President Donald Trump issued another warning to Iran, stating that the “clock is ticking” for Tehran to agree to a deal.
Reports also suggested that the United States and Israel were actively discussing additional military operations against Iran as diplomatic negotiations continued to struggle.
Last week, Trump had stated that the US-Iran ceasefire was on “massive life support,” signalling increasing uncertainty surrounding peace efforts in the region.
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The Strait of Hormuz remained effectively closed after Iran blocked the key shipping route in late February. The disruption has significantly affected oil shipments to Asian markets, tightening global crude supply conditions.
The continued closure of the waterway has remained a major supportive factor for crude oil prices, as traders assess the risk of prolonged supply disruptions.
A recent US-China summit held last week delivered limited progress regarding the ongoing Iran conflict. Markets were left disappointed as the discussions failed to produce meaningful diplomatic breakthroughs that could ease geopolitical tensions.
As a result, investors continued to factor in heightened geopolitical risk premiums across energy markets.
Crude oil prices remain highly sensitive to geopolitical developments in the Middle East as tensions between the US and Iran continue to escalate. Supply concerns linked to disruptions in the Strait of Hormuz and growing military uncertainty are likely to keep energy markets volatile in the near term.
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Published on: May 18, 2026, 8:06 AM IST
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