Why is Iran attacking the UAE again as US attempts to open Strait of Hormuz?

Iran, on Monday, launched a series of missile and drone strikes targeting the United Arab Emirates (UAE), alongside attacks on commercial shipping in and around the Strait of Hormuz.

The latest escalation is widely seen as the most serious confrontation since hostilities betwen Tehran and Washington temporarily halted, with both sides engaging in competing naval strategies.

How the Strait of Hormuz standoff is faring

Strait of Hormuz, a narrow maritime corridor linking the Gulf to international waters, has long been considered one of the most critical arteries for global energy trade, with approximately one-fifth of the world’s oil and liquefied natural gas shipments passing through it under normal conditions.

The current confrontation can be traced back to the conflict that erupted on February 28, when the United States and Israel initiated military strikes against Iran.

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In the weeks that followed, Iran moved to assert control over maritime traffic through the strait, effectively curbing the movement of tankers and commercial vessels.

In response, the United States deployed its naval forces to counter Iranian actions, resulting in a de facto maritime blockade imposed by both sides.

Washington has accused Tehran of restricting international shipping, while Iran has characterised the US naval presence as an act of war aimed at disrupting its own trade routes.

On Monday, the situation developed when US President Donald Trump announced a new naval initiative intended to escort stranded ships through the strait. The operation, referred to as “Project Freedom,” was described as an effort to restore safe passage for commercial vessels amid weeks of near-total disruption.

However, details surrounding the initiative remained limited. Trump disclosed the plan via social media, just days after a legal deadline under US law had passed requiring congressional authorisation for ongoing military engagement.

He informed Congress that the war had effectively been “terminated,” a position that has been contested by some lawmakers.

Despite the stated objective of reopening the strait, initial outcomes suggested that the operation did not achieve a significant increase in shipping activity.

Major maritime companies indicated reluctance to resume transit without a formal resolution to hostilities, citing safety concerns and sharply increased insurance costs.

Iran’s Islamic Revolutionary Guard Corps has maintained that passage through the strait must occur under its approval, reinforcing Tehran’s assertion of control over the waterway.

Why Iran attacked the UAE again

The US attempt to re-establish maritime access appears to have triggered a swift and forceful response from Iran. Tehran launched a series of missile and drone attacks across the Gulf, including strikes on UAE territory.

Iranian state television reported that the strikes were carried out in response to what it described as “the US military's adventurism.”

Among the most notable incidents was an attack on Fujairah, a major UAE oil port located outside the Strait of Hormuz. The facility holds strategic importance as one of the few export routes in the region that does not require passage through the strait.

Following the strike, fires broke out in an oil industry zone, prompting emergency responses from firefighting teams.

The UAE confirmed that its air defence systems were actively engaging incoming missile and drone threats, while authorities took precautionary measures to ensure public safety. Schools across the country shifted to remote learning as a result of the heightened security situation.

In addition to Fujairah, Iranian military activity extended across the UAE coastline. Iranian news agencies reported that the Revolutionary Guards Navy had expanded its operational area to include key UAE ports such as Fujairah and Khorfakkan, as well as coastal regions of the Umm Al Quwain emirate.

The UAE government condemned the attacks as a serious escalation and stated that it reserves the right to respond, signalling the potential for further military developments.

How commercial vessels are getting caught in the crossfire

Several commercial vessels have reported incidents of explosions, fires, or damage in and around the Strait of Hormuz.

South Korea confirmed that one of its merchant ships experienced an explosion and fire in its engine room while transiting the strait. Although no injuries were reported, authorities stated that the cause of the incident remained unclear, leaving open the possibility of either an attack or an internal malfunction.

British maritime security agency UKMTO reported multiple incidents involving vessels near the UAE coast, including one approximately 36 nautical miles north of Dubai. Separate reports indicated additional disruptions earlier in the day.

The UAE also accused Iran of launching drone attacks against an empty oil tanker operated by its state-owned energy company, ADNOC. The vessel was reportedly targeted while attempting to pass through the strait.

Iran may have been responsible for as many as four attacks on ships in the Gulf region within a 24-hour period, according to various reports. These incidents involved vessels from different countries, highlighting the broad international impact of the conflict.

The US military stated that it had intercepted Iranian cruise missiles and drones and destroyed six small Iranian boats during the course of the day. Admiral Brad Cooper, the commander of US forces in the region, issued a warning advising Iranian units to maintain distance from American assets involved in the operation.

At the same time, the US reported that two of its merchant ships had successfully navigated the strait under naval escort, although it did not specify the timing of these crossings. Iran disputed these claims, denying that any such movements had occurred in recent hours.

Shipping company Maersk, however, confirmed that a US-flagged vessel, the Alliance Fairfax, had exited the Gulf via the Strait of Hormuz with military escort.

Iran initially reported that it had struck a US warship approaching the strait, but US officials denied this assertion. Iranian authorities later clarified that their forces had fired warning shots, prompting the vessel to change course.

Iran’s unified command also issued a directive to commercial shipping, stating that all vessels, including oil tankers, must coordinate with its armed forces before entering the strait.

How oil markets are reacting to recent developments

Oil prices surged sharply on Monday, rising by more than 5 per cent amid reports of Iranian attacks and shipping disruptions.

The following day, prices eased slightly, with Brent crude falling by 1.1 per cent to $113.22 per barrel and US West Texas Intermediate dropping by 1.9 per cent to $104.40.

Market analysts attributed the decline to profit-taking following the previous day’s gains, rather than a fundamental shift in underlying conditions.

The successful escorted passage of a US-flagged vessel provided some reassurance, but experts emphasised that it did not represent a broader reopening of the strait.

“The successful escorted exit of the Maersk-operated vessel has helped ease some immediate supply disruption fears,” Tim Waterer, chief market analyst at KCM Trade told Reuters.

“It shows that limited safe passage is possible under current conditions and helps chip away at some of the worst-case supply disruption fears. However, it's still very much a one-off event rather than a full reopening,” he said in an email.

Other analysts echoed similar concerns, noting that geopolitical risks remain elevated.

“The recent dip does look like a bit of profit-taking after a strong run-up, rather than a structural shift in the backdrop,” said Priyanka Sachdeva, a senior market analyst at Phillip Nova.

“The geopolitical risk premium tied to the Strait of Hormuz remains firmly in place, so the downside is likely to stay limited.”

“In the very near term, prices could see some consolidation or mild pullback as markets reassess positioning and react to mixed diplomatic signals.”

Industry leaders have also warned of potential supply shortages. Chevron Chairman and CEO Mike Wirth told Reuters that disruptions linked to the closure of the strait would begin to manifest in physical oil supply constraints globally.

Financial institutions have raised similar concerns. Goldman Sachs noted that global oil stockpiles are approaching their lowest levels in eight years, with rapid depletion becoming a key issue.

“With the world rapidly burning through commercial stockpiles, strategic reserves, and crude held in floating storage, the underlying supply squeeze remains a potent tailwind for oil prices,” IG market analyst Tony Sycamore said in a note.

Analysts from Eurasia Group warned that oil prices could remain above $100 per barrel, with US gasoline prices potentially reaching $5 per gallon by June if the strait remains closed.

How negotiations are faring

Iran has indicated that discussions are ongoing through mediation by Pakistan, including the exchange of proposals aimed at resolving the conflict.

Iranian state media reported that the United States had conveyed its response to a 14-point Iranian proposal and Tehran is currently reviewing the response, though details of the proposal have not been made public.

The Iranian proposal reportedly suggests postponing discussions related to its nuclear programme until after an agreement is reached to end the war and resolve disputes over maritime access.

Trump stated over the weekend that he was still evaluating the proposal but indicated that he would likely reject it.

Iranian Foreign Minister Abbas Araqchi emphasised that a military solution to the crisis does not exist, highlighting the importance of continued dialogue. “Project Freedom is Project Deadlock,” he wrote on social media.

At the same time, attempts to organise additional rounds of face-to-face talks between US and Iranian officials have so far been unsuccessful.

US intelligence assessments suggest that damage to Iran’s nuclear facilities from previous strikes has been limited, despite attacks carried out by the United States and Israel, reported Reuters.

Iran has consistently maintained that its nuclear programme is intended for peaceful civilian purposes. However, Washington continues to seek the removal of Iran’s enriched uranium stockpiles to prevent further processing that could lead to the development of nuclear weapons.

Meanwhile, the UAE, which recently exited OPEC, has reiterated its commitment to meeting global oil demand while cooperating with other producers. OPEC and its allies have announced plans to increase output targets by 188,000 barrels per day in June for several member countries.

With inputs from agencies