• Brent crude jumps over $5, US crude rises more than $3 after drone attack triggers fire at Fujairah petroleum site.
  • The incident disrupts loading operations at one of the world's key oil storage and bunkering hubs.
  • Attack highlights vulnerability of Middle East energy infrastructure amid heightened regional tensions.

Fujairah fire rattles oil markets

Oil futures extended gains on Monday after a drone attack from Iran sparked a fire at a petroleum industrial site in Fujairah, the UAE's main oil hub on the east coast. Brent crude surged over $5 to trade near $90, while US crude rose more than $3, as traders priced in supply disruption risks.

The Fujairah Civil Defense said it contained the blaze, which erupted at a facility in the port area. According to people familiar with the matter, some oil-loading operations were temporarily halted, though authorities later said exports resumed. The extent of damage was not immediately clear.

"This attack underscores the fragility of energy supply chains in the Gulf," said an analyst at a major trading house. "Fujairah is a critical chokepoint for oil flows bypassing the Strait of Hormuz."

Fujairah hosts extensive storage, refining, and bunkering infrastructure, serving as a vital export route for crude from the UAE and other regional producers. The attack comes as tensions between Iran and the US remain high, with recent drone and missile strikes targeting energy assets in the region.

"Every incident like this adds a risk premium to crude," said a trader in Singapore. "The market is on edge."

Geopolitical tensions fuel volatility

The attack is the latest in a series of drone strikes on UAE energy facilities, including a 2022 assault on Abu Dhabi's oil infrastructure. Such events have compounded concerns about the security of Gulf energy infrastructure, spurring talks of accelerating diversification of supply routes and boosting strategic reserves.

Short-term, oil prices are likely to remain elevated until the situation stabilizes and the UAE provides assurances on output capacity. Longer-term, analysts say the incident could prompt greater investment in protective measures for critical infrastructure.

Market reaction

Both OPEC and the US Energy Information Agency declined to comment. Efforts to reach officials at Fujairah's port authority were not immediately successful.

Correction: An earlier version of this article misstated the extent of the price increase. Brent rose over $5, not $6.