UAE-Iran Tensions Send Oil Prices Soaring Amid Regional Security Concerns

Oil prices surged to their highest in nearly three weeks as tensions between the UAE and Iran escalated, with the UAE cutting all economic ties with Tehran after accusing Iran of firing ballistic missiles at its territory.

The move came as US President Donald Trump said there were no talks ongoing with Iran to end the war that has upended energy markets. Analysts believe a 'closed for longer scenario' is pricing oil and refined products higher, Arne Lohmann Rasmussen, chief analyst at Global Risk Management, said.

Fresh US government data showed refinery runs rose to their highest since September 2019, driven by the Gulf Coast, while domestic crude stockpiles increased 4.4 million barrels last week. However, distillate inventories fell 1.5 million barrels to a more than month-low.

The margin for making diesel from crude oil in the US has topped $100 a barrel, setting all-time highs, while gasoil futures have more than doubled this year in Europe. Meanwhile, three supertankers linked to China U-turned in the Strait of Hormuz, highlighting risks that remain elevated in the critical chokepoint.