Sunday, 13 October, 2019

Oil prices jump after Iranian oil tanker explosions

Oil prices jumped by more than 2 percent on Friday after an Iranian oil tanker in the Red Sea was hit by two suspected rockets off the coast of Saudi Arabia, raising the possibility of supply disruptions from a crucial producing region.

Iranian Press TV reported that the oil tanker Sinopa, owned by the National Iranian Oil Co, was struck off the coast of the Saudi Arabian city of Jeddah. The ship suffered heavy damage and was leaking oil into the water, unnamed sources told Iran’s Students News Agency ISNA.

All crew members of the Iranian oil tanker are safe and the situation of the tanker is stable, Iran’s Nour news agency said.

The National Iranian Tanker Company (NITC) said in a statement the hull of the ship sustained two separate explosions about 100km (60 miles) off the Saudi port city of Jeddah.

It said the blasts were “probably caused by missile strikes”.

International benchmark Brent crude futures rose as much as 2.3 percent to $60.46 a barrel and were at $60.13 per barrel, up $1.02, by 06:48 GMT.

US West Texas Intermediate (WTI) crude futures rose as much as 2.1 percent to $54.69 a barrel and were at $54.47 per barrel, up 92 cents.

“Spare capacity remains fragile and with supply chain vulnerability a worrying concern at virtually every Middle East oil field, traders continue to hedge supply risk premium,” said Stephen Innes, Asia Pacific market strategist at AxiTrader.

The reports of the Iranian oil tanker incident follow the September 14 attacks on two Saudi Arabian oil processing plants that knocked out more than half of the kingdom’s crude oil output causing a spike in oil prices.

Tensions in the Middle East have escalated in the wake of attacks on tankers and US drones in the Strait of Hormuz, a key shipping artery of the global oil trade.

SOURCE: REUTERS NEWS AGENCY

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