Oil prices hit 4-week high as UAE cuts financial ties with Iran

Crude oil prices settled at a near four-week high on Wednesday, driven by escalating tensions in the Middle East. The United Arab Emirates announced it was suspending all financial and economic transactions with Iran following recent missile attacks.

Brent crude futures settled at $91.62 a barrel, a 0.7% increase, while US West Texas Intermediate (WTI) crude rose 1.1% to $85.83 a barrel. Both benchmarks closed at their highest since July 24.

The market pressure was compounded by continued disruptions in the Strait of Hormuz, where ship traffic remains slow. Data showed only six commodity vessels transited the strait on Tuesday, down from a 10-day average of 11. Additionally, oil shipments from Russia’s western ports reportedly fell by 15% in the first half of August, further impacting supply considerations.

In response to reports that Iran has considered targeting American military assets, NATO has issued a warning that it is prepared to defend every member state. An alliance official said NATO would confront any threat and take all necessary measures for protection.

The warning followed British media reports suggesting Iranian military planners had examined potential retaliatory operations against U.S. military facilities in southeastern Europe, with installations in Bulgaria and Cyprus reportedly among the locations considered. The reports also mentioned that Iranian authorities looked at possible ways to disrupt undersea fiber-optic cables passing through the Strait of Hormuz.

However, it has not been confirmed that Iran has made a final decision to carry out such attacks.

Tensions between the United States and Iran have escalated further, with a Financial Times report on Tuesday claiming that Tehran is considering potential attacks on US military assets.