More Pressure on Oil Markets as Iran Threatens UAE Ports After US Strikes Kharg Island

Nigeria’s crude oil production

More Pressure on Oil Markets as Iran Threatens UAE Ports After US Strikes Kharg Island

Tensions in the Middle East continued to escalate yesterday after Iran vowed retaliation against strategic ports and facilities in the United Arab Emirates (UAE) following last week’s US attack on its key oil export hub on Kharg Island. The developments have added fresh pressure on global oil markets already strained by disrupted shipping routes and geopolitical risk. Iran’s response included direct warnings to residents near major UAE facilities — including Jebel Ali Port in Dubai, Khalifa Port in Abu Dhabi, and Fujairah Port in the eastern emirate — to evacuate before possible attacks. Tehran’s leadership cited these locations as potential targets because they house American interests and military assets that Iran claims were used to launch recent strikes against its territory.

Officials in the UAE have not confirmed imminent attacks but have suspended some oil loading operations in Fujairah after a separate drone strike caused a fire at the port earlier this week. Fujairah, outside the Strait of Hormuz, is a crucial hub for the UAE’s crude exports and supplies about 1 million barrels per day of Murban crude — equivalent to roughly 1% of global demand.

In a statement attributed to the country’s Revolutionary Guards, Iran declared that it considers it a “legitimate right to defend its national sovereignty” by targeting what it described as “American hideouts” and military positions in the UAE. The government acknowledged the US military’s recent assault on Kharg Island, which US commanders say struck more than 90 Iranian military targets, including storage facilities for naval mines and missiles. Although the United States says it avoided damage to Iran’s oil infrastructure, Iranian authorities have disputed claims regarding the effectiveness of the attack. Video footage and local reports suggest some facilities on the island — a key transit point for about 90% of Iran’s crude exports — may remain functional despite the strikes.

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Iran’s foreign ministry earlier suggested it might allow limited passage of oil tankers through the Strait of Hormuz only if crude cargoes are sold in Chinese yuan, challenging the dominance of the US dollar in global oil trade — a move that, if implemented, could have major implications for commodity markets.

The geopolitical escalation has already injected a fresh “risk premium” into oil prices, pushing benchmarks higher. Traders globally are monitoring the situation closely, with concerns that any disruption to key sea routes — particularly the Strait of Hormuz, through which a significant portion of world oil supplies transit — could sharply tighten global supply. Crude oil prices, which had climbed over recent sessions, remained elevated in markets yesterday. The threat of attacks near major shipping lanes and export terminals has compounded fears that supply could be interrupted for longer than previously anticipated.

The crisis has also influenced domestic fuel prices in countries heavily reliant on imported refined products. In Nigeria, pump prices for petrol remained above ₦1,000 per litre in many areas, reflecting the ripple effect of higher global crude prices. However, analysts noted that fuel queues were largely absent, suggesting that traders have adjusted distribution and pricing relatively smoothly for now. Transport fares, according to commuters and transport unions, have not decreased despite the recent price stability at filling stations, with many operators citing ongoing cost pressures from exchange rate volatility and logistical expenses.

In Abuja, the Presidency dismissed claims by former Anambra State governor and Labour Party presidential candidate Peter Obi, who had attributed the rising petrol prices partly to Nigeria’s lack of a strategic petroleum reserve (SPR). The government described Obi’s explanation as an oversimplification of global energy market dynamics. Olusegun Dada, Special Assistant to the President on Social Media, reiterated that Nigeria’s price deregulation means fuel costs are now driven by crude oil prices, exchange rates, shipping costs and geopolitical risks rather than government price controls. He said strategic reserves, while valuable for emergency situations like wars or embargoes, are not designed to stabilize everyday retail prices. Instead, Nigeria’s energy challenges, he argued, stem from limited refining capacity, dependency on imported refined products, and structural inefficiencies in the sector.

In the midst of rising turmoil, US President Donald Trump reiterated calls for other nations to help secure the Strait of Hormuz, one of the world’s most critical oil shipping corridors. In a social media statement, Trump said he expected countries “especially those affected by Iran’s attempted closure of the Hormuz Strait” to dispatch warships to protect maritime traffic. He named China, France, Japan, South Korea, and the UK as potential partners, though none had publicly confirmed participation at the time of his remarks. Trump also warned that Iran, despite suffering significant damage, continued to pose risks to shipping, saying the US would “continue military operations to secure the route” and ensure it is “open, safe, and free.”