Oil Prices Jump 4% on Renewed Iran Tensions
By Reuters | 04 May, 2026

Brent futures rose $4.49, or 4.2% to $112.66 per barrel even before strikes by Iran and the US.

Oil prices jump 4% as renewed Iran tensions threaten supply

Oil prices rose 4% on worries over supply disruptions due to renewed Gulf tensions on Monday, including a United Arab Emirates notice that its air defense systems were responding to a missile threat and a fire on a South Korean vessel.

Brent futures rose $4.49, or 4.2%, to $112.66 per barrel at 11:16 a.m. EDT (1516 GMT), while U.S. West Texas Intermediate (WTI) crude rose $1.71, or 1.7%, to $103.65.

President Donald Trump said on Sunday the U.S. would start helping free ships stranded in the Gulf. On Monday, the U.S. military said two U.S. Navy guided-missile destroyers had entered the Gulf to break an Iranian blockade and that two U.S. merchant ships had transited the Strait of Hormuz.

"The path for prices remains skewed to the upside as long as flows through the strait remain restricted," UBS analyst Giovanni Staunovo said.

South Korea said there was a fire and an explosion on a vessel operated by HMM in the Strait on Monday.

Earlier, the UAE accused Iran of attacking an empty crude oil tanker belonging to Abu Dhabi state oil firm ADNOC with drones as it attempted to transit the Strait.

The United Kingdom Maritime Trade Operations (UKMTO) said it had received a report of an incident involving a cargo vessel about 36 nautical miles north of Dubai.

About 20% of global oil and liquefied natural gas (LNG) supplies passed through the Strait before the U.S. and Israel launched strikes against Iran on February 28.

AROUND THE WORLD

The energy minister in the UAE, which left OPEC last week, said the country owes it to its investment partners to produce what global oil markets require without restrictions, while cooperating with other crude producers.

OPEC and its allies, known as OPEC+, said it would raise oil output targets by 188,000 barrels per day in June for seven members, marking the third consecutive monthly increase.

In Pakistan, the U.S. has evacuated 22 crew members held aboard an Iranian container vessel to Pakistan and will hand them over to Iranian authorities on Monday, Pakistan's foreign ministry said, calling the move a "confidence-building measure".

In India, a senior petroleum ministry official said the country has no plans to compensate state-run fuel retailers for losses from selling transport fuels below market prices even as companies raised prices for some industrial and bulk customers.

In Ukraine, Russia has stepped up its targeting of Ukrainian port infrastructure this year, Kyiv said, using more than 800 drones in its attacks in the first four months of 2026, more than 10 times the number in the same period a year ago.

Meanwhile, global brokerages have steadily pulled back from early-year expectations the U.S. Federal Reserve would cut interest rates twice in 2026, with forecasts now sharply split between some easing and no cuts at all this year, fueled by elevated inflation risks from rising energy costs.

Central banks like the Fed use interest rates to control inflation. Lower interest rates reduce consumer borrowing costs and can boost economic growth and demand for oil.

(Reporting by Scott DiSavino in New York and Ahmad Ghaddar in London; Additional reporting by Florence Tan and Sudarshan Varadhan; Editing by Louise Heavens, Bernadette Baum, Paul Simao and Alexander Smith)