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.” Author