Oil rebounded over 3% as fresh attacks on UAE infrastructure shatter hopes for rapid maritime normalisation

Global oil prices sharply reversed their recent pullback on Tuesday, driven by a violent resurgence of strikes on United Arab Emirates export facilities that swiftly extinguished market optimism over a partial reopening of the Strait of Hormuz.

Brent crude futures settled up $3.21, or 3.2%, at $103.42 a barrel. US WTI climbed $2.71, or 2.9%, to close at $96.21. The aggressive upward repricing decisively erased Monday's policy-induced selloff, as the structural reality of the three-week offensive reasserts dominance over trading algorithms.

The bullish momentum was fundamentally underpinned by renewed kinetic attacks on the critical UAE port of Fujairah. The third strike in four days ignited a fire at the export terminal, partially halting loadings at a facility responsible for clearing roughly 1% of global demand. Consequently, the effective closure of the strait has forced the UAE to slash its crude output by more than half, propelling Middle Eastern physical benchmarks to record premiums as traders scramble for uncontested barrels.

Diplomatic friction continues to exacerbate this logistical paralysis. European allies explicitly rebuffed appeals to form a multilateral naval escort coalition until hostilities cease. While the White House projects a rapid conclusion as select tankers transit the chokepoint, the market remains highly sceptical. Even as the International Energy Agency floats further strategic reserve releases, these paper interventions remain vastly outmatched by the immediate destruction of physical supply.

Traders are now aggressively pricing in a prolonged impairment of the Gulf energy apparatus. With the geopolitical risk premium entrenched by persistent maritime threats, the forward outlook remains severely skewed to the upside. As physical availability tightens against a backdrop of fractured alliances, technical analysis indicates the underlying structural deficit could propel WTI toward resistance levels near $124 a barrel, guaranteeing exceptionally high short-term volatility.


Written by: Aiman Haikal