Brent oil price nears $120 per barrel after Iran attacks tanker off UAE

Oil prices rose to nearly $120 per barrel on Tuesday, after Iran attacked a tanker off the coast of the United Arab Emirates.

Brent prices, the international benchmark, rose about 5% to $118.50 per barrel by 9:36 a.m. ET. U.S. crude oil was up 0.67% to $103.57 per barrel.

Iran attacked a Kuwaiti oil tanker anchored outside Dubai. No injuries were reported and no oil spill occurred, according to a statement from Kuwait Petroleum Corporation.

That attack indicates a further tightening of the Islamic Republic’s grip on the Strait of Hormuz, targeting tankers just outside the waterway, said Ben Emons, CIO at FedWatch Advisors, highlighting renewed risks of further disruption to energy flows.

President Donald Trump, meanwhile, told his aides that he was willing to end U.S. operations against Iran even if the Strait of Hormuz remained shut, administration officials told The Wall Street Journal.

“The result is a more asymmetric game, with the U.S. leaning toward exit and Iran still incentivized to impose cost,” Emons said.

Trump had earlier threatened to expand attacks to Iran’s civilian energy infrastructure, including water desalination plants, if Tehran failed to reopen the Strait of Hormuz.

Trump said Monday that if Tehran didn’t reopen the Strait of Hormuz and agree to a peace deal for ending the war, “we will conclude our lovely ‘stay’ in Iran by blowing up and completely obliterating” electricity plants, oil facilities, and “possibly” desalination infrastructure, according to a Truth Social post.

Trump has regularly vacillated between hailing talks with Iran as productive and warning that he’s prepared to order more military forces to the region.

He told reporters on Monday that Tehran agreed to “most of” the 15-point ceasefire proposal put forth by the U.S. while Tehran has publicly rejected the terms and responded with conditions of its own, including maintaining control over the Strait of Hormuz.

Trump has also reportedly weighed the option of sending in ground forces to seize Kharg Island, a major fuel hub that facilitates 90% of Iran’s crude exports.

Shipping traffic through the Hormuz waterway, which typically carried a fifth of global seaborne oil shipments before the conflict, has virtually ground to a halt since the war began on Feb. 28.

Experts warn that a potential ground operation to seize the Kharg Island could risk raising U.S. casualties and extending the war’s cost and duration.