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58m ago

Oil Tops $110 After UAE Nuclear Site Drone Fire With Strait of Hormuz Largely Closed

Shrinking oil stocks signal a rising risk of shortages.

A pumpjack, used to help lift oil from a well, in the Permian basin near Midland, Texas, U.S., October 8, 2025. REUTERS/Arathy Somasekhar
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A flight of U.S. Army AH-64 Apache attack helicopters, armed with rockets and Hellfire missiles, taxi out to conduct a scheduled flight in the U.S. Central Command area of responsibility.

Overview

  • Crude prices jumped in early Monday Asian trading after reports of a drone-caused fire near the UAE’s Barakah nuclear plant and Saudi drone interceptions, following Sunday’s warnings from President Trump that Iran must move fast on a deal.
  • The Strait of Hormuz remains closed to most shipping, a chokepoint that once carried about one-fifth of global oil, and the IEA says inventories are being drained at a record pace with buffers nearing critical levels.
  • Bond markets reeled last week as energy costs climbed, with the U.S. 30-year Treasury yield near 5% and equities wobbling, and G7 finance ministers meet in Paris to discuss the economic strain from tight energy supplies.
  • Trump has weighed military options on Iran, with a meeting held Sunday and another planned for Tuesday, and Iranian officials warned of consequences if threats escalate.
  • Trade routes are being rewired to cope with lost Gulf barrels, including reports of U.S. crude heading to Australia, underscoring that only reopening the strait would reset global supply patterns and calm pump prices.