Gulf Conflict Escalates as US Claims Iran Attacked UAE, Supertanker Ablaze in Strait

The conflict in the Gulf has flared up again after a month of relative calm. The United Arab Emirates (UAE) denies US claims that it was attacked by Iran, while an Iranian supertanker is ablaze in the Strait of Hormuz. Meanwhile, Saudi Arabia is considering an $8 billion funding package to address the impact of the war on its economy.

The UAE has condemned the use of a drone intercepted over its territorial waters as a 'dangerous escalation' and warned that it reserves the right to respond. Anwar Gargash, a presidential adviser to the UAE, called for de-escalation and the resumption of shipping through the Strait of Hormuz.

Natural gas prices in Europe have surged by 5.7 per cent to over 70 euros per megawatt-hour after the US and Iran resumed trading barbs. The Strait of Hormuz has effectively become a bottleneck for liquefied natural gas flows from the Persian Gulf, putting pressure on Europe to replenish its low gas stocks ahead of the heating season.