BNY's Bob Savage highlights that the Iran conflict, a drone attack in the United Arab Emirates (UAE) and refinery constraints are pushing Brent toward $110, with fears of airline shutdowns and refinery limits. The UAE’s strategic exit from OPEC/OPEC+ and focus on bypassing the Strait of Hormuz, alongside expiring U.S. sanctions waivers on Russian and Iranian crude, underscore a structurally tighter Oil backdrop.

Middle East tensions keep crude elevated

"A drone attack on a UAE nuclear site, stalled talks with the U.S. and more shuttle diplomacy between Pakistan, Qatar and Iran have combined to drive oil 2% higher at the APAC open."

"The testing of Brent $110 is dominating the G7 Finance Meeting in Paris today."

"Previously producing over 3 million barrels per day (bpd), the UAE’s output has dropped to 1.8-2.1 million bpd due to the conflict in the region."

"The Trump administration has allowed the sanctions waiver on some Russian crude oil sales to expire, ending a brief easing period despite tight global oil markets caused by the Iran war."

"Abu Dhabi is accelerating the West-East pipeline project to double export capacity by 2027, aiming to bypass the Strait of Hormuz and enhance energy supply resilience."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)