LONDON: Oil rose more than 3 percent toward $64 a barrel on Thursday after Iran shot down a US military drone, raising fears of a military confrontation between Tehran and Washington.
Expectations that the US Federal Reserve could cut interest rates at its next meeting, stimulating growth in the world’s largest oil-consuming country, and a drop in US crude inventories also supported prices.
US crude was up 5.8 percent at $59.91 per barrel, a three-week high. Brent crude was up 4.3 percent at $64.52 per barrel, also a three-week high, having earlier gained 3.4 percent to $63.93. US West Texas Intermediate crude rose $2.33 to $56.09.
“The risk of a military conflict in the Middle East has risen because of a ratcheting up of tensions between the United States and Iran,” said Abhishek Kumar of Interfax Energy in London. “Elsewhere, the US Federal Reserve has signaled its willingness to loosen monetary policy over the coming months, which is being perceived as favorable to oil demand.”
The drone was downed in international airspace over the Strait of Hormuz by an Iranian surface-to-air missile, a US official said. Iran’s Revolutionary Guards said the drone was flying over southern Iran. Tension has been rising in the Middle East, home to over a fifth of the world’s oil output, after attacks on two tankers near the Strait of Hormuz, a chokepoint for oil supplies. Washington blamed Tehran for the tanker attacks. Iran denied any role.
Concern about slowing economic growth and a US-China trade dispute has pulled oil lower in recent weeks. Brent reached a 2019 high of $75 in April.
The prospect of further rate cuts could prove the more significant factor for oil, said Petromatrix analyst Olivier Jakob, should Iran-US tension not escalate.
“The Fed and the cutting of rates is something that will provide more substantial support,” he said.
Also propelling oil higher on Thursday was a decline in US crude inventories and the prospect of prolonged supply restraint by producer group OPEC and its allies.
US crude stocks fell by 3.1 million barrels last week, more than analysts expected, the Energy Information Administration said on Wednesday.
OPEC and allies including Russia agreed this week to meet on July 1-2, ending a month of wrangling about the timing.
The coalition known as OPEC+ looks set to extend a deal on cutting 1.2 million barrels per day of production. The deal expires at the end of June.
Oil jumps as Iran shoots down US drone in Gulf
Oil jumps as Iran shoots down US drone in Gulf
- The drone was downed in international airspace over the Strait of Hormuz by an Iranian surface-to-air missile
- Also propelling oil higher was a decline in US crude inventories and the prospect of prolonged supply restraint by producer group OPEC and its allies
First EU–Saudi roundtable on critical raw materials reflects shared policy commitment
RIYADH: The EU–Saudi Arabia Business and Investment Dialogue on Advancing Critical Raw Materials Value Chains, held in Riyadh as part of the Future Minerals Forum, brought together senior policymakers, industry leaders, and investors to advance strategic cooperation across critical raw materials value chains.
Organized under a Team Europe approach by the EU–GCC Cooperation on Green Transition Project, in coordination with the EU Delegation to Saudi Arabia, the European Chamber of Commerce in the Kingdom and in close cooperation with FMF, the dialogue provided a high-level platform to explore European actions under the EU Critical Raw Materials Act and ResourceEU alongside the Kingdom’s aspirations for minerals, industrial, and investment priorities.
This is in line with Saudi Vision 2030 and broader regional ambitions across the GCC, MENA, and Africa.
ResourceEU is the EU’s new strategic action plan, launched in late 2025, to secure a reliable supply of critical raw materials like lithium, rare earths, and cobalt, reducing dependency on single suppliers, such as China, by boosting domestic extraction, processing, recycling, stockpiling, and strategic partnerships with resource-rich nations.
The first ever EU–Saudi roundtable on critical raw materials was opened by the bloc’s Ambassador to the Kingdom, Christophe Farnaud, together with Saudi Deputy Minister for Mining Development Turki Al-Babtain, turning policy alignment into concrete cooperation.
Farnaud underlined the central role of international cooperation in the implementation of the EU’s critical raw materials policy framework.
“As the European Union advances the implementation of its Critical Raw Materials policy, international cooperation is indispensable to building secure, diversified, and sustainable value chains. Saudi Arabia is a key partner in this effort. This dialogue reflects our shared commitment to translate policy alignment into concrete business and investment cooperation that supports the green and digital transitions,” said the ambassador.
Discussions focused on strengthening resilient, diversified, and responsible CRM supply chains that are essential to the green and digital transitions.
Participants explored concrete opportunities for EU–Saudi cooperation across the full value chain, including exploration, mining, and processing and refining, as well as recycling, downstream manufacturing, and the mobilization of private investment and sustainable finance, underpinned by high environmental, social, and governance standards.
From the Saudi side, the dialogue was framed as a key contribution to the Kingdom’s industrial transformation and long-term economic diversification agenda under Vision 2030, with a strong focus on responsible resource development and global market integration.
“Developing globally competitive mineral hubs and sustainable value chains is a central pillar of Saudi Vision 2030 and the Kingdom’s industrial transformation. Our engagement with the European Union through this dialogue to strengthen upstream and downstream integration, attract high-quality investment, and advance responsible mining and processing. Enhanced cooperation with the EU, capitalizing on the demand dynamics of the EU Critical Raw Materials Act, will be key to delivering long-term value for both sides,” said Al-Babtain.
Valere Moutarlier, deputy director-general for European industry decarbonization, and directorate-general for the internal market, industry, entrepreneurship and SMEs at European Commission, said the EU Critical Raw Materials Act and ResourceEU provided a clear framework to strengthen Europe’s resilience while deepening its cooperation with international partners.
“Cooperation with Saudi Arabia is essential to advancing secure, sustainable, and diversified critical raw materials value chains. Dialogues such as this play a key role in translating policy ambitions into concrete industrial and investment cooperation,” she added.
