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UPDATE 4-Oil prices surge after suspected tanker attack near Iran

Reuters | Muscat | Updated: 13-06-2019 14:12 IST | Created: 13-06-2019 13:52 IST
UPDATE 4-Oil prices surge after suspected tanker attack near Iran
Image Credit: Flickr

Oil prices jumped as much as 4% on Thursday after a suspected attack on two tankers in the Gulf of Oman near Iran and the Strait of Hormuz, through which a fifth of global oil consumption passes.

The two tankers, the Marshal Islands-flagged Front Altair <C}KA7309834437> and the Panama-flagged Kokuka Courageous <C}KH7309510378>, have been evacuated and the crews were safe, shipping sources said. The Front Altair is carrying naphtha and the Kokuka Courageous methanol.

The charterer of the former said the vessel was "suspected of being hit by a torpedo". The manager of the latter said it had been damaged as a result of a "suspected attack" but that its cargo was still intact. The incident followed last month's nearby sabotage attacks on vessels off the Fujairah emirate, one of the world's largest bunkering hubs.

Brent crude futures were up $1.72 at $61.69 a barrel by 0757 GMT, having risen earlier by as much as 4.45% to $62.64. U.S. West Texas Intermediate crude futures were up $1.32 at $52.46 a barrel. WTI earlier rose as much as 3.85% to $53.11.

Both benchmarks are nevertheless headed for a weekly loss. Oil prices had slumped in the previous session on an unexpected rise in U.S. crude stockpiles and a dimming outlook for global oil demand.

For an interactive graphic on U.S. crude stocks, click https://tmsnrt.rs/2XkQF8e The United Kingdom Maritime Trade Operations, part of the Royal Navy, said on Thursday that it was aware of an incident in the Gulf of Oman, near the Iranian coast.

"The UK and its partners are currently investigating," it said. U.S. National Security Adviser John Bolton said on May 29 that naval mines "almost certainly from Iran" were used to attack the tankers off the United Arab Emirates last month, and warned Tehran against conducting new operations.

Tensions in the Middle East have escalated since U.S. President Donald Trump withdrew from a 2015 multinational nuclear pact with Iran and reimposed sanctions, notably targeting Tehran's key oil exports. Iran, which has distanced itself from the previous attacks, has said it would not be cowed by what it called psychological warfare.

Also supporting oil bulls were signs that OPEC members were close to reaching an agreement on continuing production cuts.


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