Oil prices rise as Trump warns 'clock ticking' on peace talks, after UAE drone strike

(Sharecast News) - Oil prices rose on Monday after Donald Trump warned Iran that time was running out for peace talks and following a drone strike over the weekend on a United Arab Emirates nuclear power plant.

The US president said on Truth Social on Sunday: "For Iran, the clock is ticking, and they better get moving, fast, or there won't be anything left of them."

He added: "Time is of the essence."

There were also reports over the weekend that the US and Israel are preparing to resume joint attacks on Iran as soon as this week. According to the New York Times, citing two Middle East officials, the US and Israel are engaged in "intense preparations" for a potential resumption of hostilities.

They were reported to have said these were the most significant preparations since the ceasefire brokered by Pakistan in April was established.

At 0800 BST, Brent crude was up 1.8% at $111.17 a barrel, while West Texas Intermediate was 2.2% higher $107.71.

Prices were also boosted after a drone strike caused a fire near the UAE's Barakah nuclear plant over the weekend.

Patrick Munnelly at Tickmill Group said Trump's warning to Iran "has reinforced concerns that the conflict could move back toward a more active military phase, delaying any normalisation of traffic through the Strait of Hormuz".

Kathleen Brooks, research director at XTB, said: "There could be more upside to come for the oil price at the start of this week, after further cracks appeared in the ceasefire in the Middle East. There was a drone attack at a nuclear facility in the UAE, which suggests that the situation could escalate in the coming days.

"The Strait of Hormuz remains closed, and the US and Iran are no closer to a peace deal. For all of President Trump's harsh rhetoric, this has failed to break the deadlock and force Iran to end the war. This means that the biggest oil supply crisis in history carries on for another week.

"It is also worth noting that investors are not yet ready to fully price in a bearish scenario while there is still a possibility of the Strait of Hormuz reopening. The ceasefire is still formally in place, even if there have been breaches of its terms. Ultimately, this means that the market is not positioned for an extreme scenario in the Iran war, which could leave risky assets vulnerable to a deeper sell off."