Important oil hub in the UAE partially resumes operations, European stocks rebound with a V-shaped rally and close higher

The key UAE oil hub, Fujairah Port, has partially resumed operations after a drone attack, easing market concerns over Middle Eastern energy supply disruptions and prompting a rebound in European stock markets.

On Monday, the STOXX Europe 600 Index closed up 0.4%, after initially falling 0.5% during the day. Previously, European stocks had experienced their first two-week consecutive decline this year, amid fears that the ongoing Middle East conflict could last longer than expected.

Reports indicate that a drone attacked the petrochemical area of Fujairah Port in the UAE, causing a fire. This is part of a series of recent strikes on Fujairah. Just last Saturday, the port was hit by a drone attack that disrupted oil loading for about a day.

According to Inchcape Shipping Services, Fujairah Oil Terminal is currently operating partially and can handle liquid bulk cargo. However, sources familiar with the matter have revealed that crude oil loading operations by ADNOC (Abu Dhabi National Oil Company) remain suspended.

Fujairah Port’s strategic importance lies in its unique geographic location as the only oil export route for the UAE outside the Strait of Hormuz. A pipeline connecting directly to Abu Dhabi’s main oil fields converges here, making it the primary export terminal for UAE’s Murban crude oil. The port also has over 70 million barrels of oil storage capacity and serves as a key fueling hub for ships.

Additionally, according to CCTV News, Trump has pressured various parties to help reopen the Strait of Hormuz. It was also reported that the US is engaging in dialogue with Iran, which has somewhat boosted market sentiment. Stephan Kemper, Chief Investment Strategist at BNP Paribas Wealth Management, stated:

Trump is under immense pressure and needs to resolve this issue quickly.

Kemper pointed out that missile threats, market dynamics, and midterm elections are the three main factors influencing Iran’s short-term military actions.

IEA Releases Record Reserves, Supply Tightness Remains the Market Focus

Last week, the Paris-based IEA stated that the ongoing conflict has caused the largest supply disruption in oil market history and emphasized that reopening the Strait of Hormuz is crucial.

The agency is coordinating the release of a record 400 million barrels from strategic reserves, with supplies in Asia leading the way.

Among Persian Gulf oil producers, only the UAE and Saudi Arabia can bypass the Strait of Hormuz for partial oil exports.

Saudi Arabia is working to increase its Red Sea coast export capacity to compensate for the gap. However, analysts believe that ongoing attacks on Fujairah indicate that even this alternative route is facing increasing security pressures.

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