Iranian drone strikes lift Brent above $120; US yields rise
Iranian drones struck the UAE’s Fujairah Oil Industry Zone; three of four munitions were intercepted, loading was partly suspended, Brent topped $120 and the 10-year U.S. Treasury yield rose to 4.46%.
Iranian drones struck the Fujairah Oil Industry Zone on Monday, the United Arab Emirates reported, prompting a partial suspension of crude loading at the terminal and sending Brent crude above $120 a barrel. The 10-year U.S. Treasury yield climbed to 4.46%.
The UAE Ministry of Defense reported it detected four incoming munitions from Iranian territory and intercepted three over territorial waters; the fourth fell into the sea. Authorities said the sounds heard in several areas were caused by successful interceptions. Three Indian workers at the port were reported to have moderate injuries. Two passenger flights bound for Dubai were diverted as alerts spread across the Emirates.
Fujairah, fed by a pipeline built to bypass the Strait of Hormuz, is the UAE’s main oil export outlet outside the strait. Traders pushed Brent more than 5% higher on the strikes, pricing in the risk of disrupted shipments from the Hormuz-bypass hub. Loading operations at the terminal were partly suspended after multiple drone strikes in four days.
U.S. government bond yields rose sharply on the news. The 10-year Treasury yield reached 4.46%, a nine-month high, as market participants factored potential upward pressure on energy costs into inflation expectations. A bond sell-off-where investors sell bonds, lowering prices and pushing yields up-drove the move. Fed funds futures on Monday implied no Federal Reserve rate cuts until December 2027 and showed about a 38% probability of another rate increase by March 2027.
Officials said the strikes followed earlier attacks over the weekend that reportedly hit a tanker north of the port. The incidents ended a fragile ceasefire that had taken effect on April 8. An Iranian brigadier general posted on social media warning of further action.
Trade and shipping sources reported fires and damage at parts of the port and said investigations are under way into the extent of infrastructure damage and any long-term impact on flows. If loading at Fujairah remains suspended, exports that normally bypass the Strait of Hormuz could be constrained. Energy traders, shipping operators and central banks are monitoring the situation closely.
