Abu dhabi: Oil prices surged to their highest level in two weeks following stalled efforts to end a conflict involving the United States, Israel, and Iran, coupled with a drone strike on the Barakah nuclear power plant in the United Arab Emirates (UAE).
According to Thai News Agency, Brent crude futures increased by $2.03, or 1.86%, to $111.29 per barrel, reaching an intraday high of $112 per barrel, marking the peak since May 5. West Texas Intermediate (WTI) crude saw a rise of $2.31, or 2.19%, to $107.73 per barrel, with an intraday high of $108.70 per barrel, the highest since April 30. Both crude oil contracts have experienced a weekly increase of over 7% as prospects for a peace agreement to halt the conflict and reopen oil shipping routes in the Strait of Hormuz appear bleak.
Additionally, oil prices were impacted by a drone strike on May 17 targeting a generator outside the main building of the Barakah nuclear power plant in the Al Dhafra region of the UAE. The attack led to a fire but resulted in no injuries or radioactive leakage. The primary systems continued to operate, although one reactor required temporary backup generators. UAE officials condemned the incident as a grave act of terrorism, attributing responsibility to Iran or a proxy group.
In response to the UAE incident, the Saudi Arabian military reported successfully intercepting three bomb-laden drones that breached Iraqi airspace. The Saudi government criticized the attack on the UAE facility and asserted its right to retaliate as deemed appropriate.
Financial analysts caution that ongoing tensions with Iran could sustain elevated oil prices over the long term, compelling central banks to maintain high interest rates and posing a challenge to global economic stability.