Missiles hit tanker off Saudi

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An Iranian-owned oil tanker was hit by two missiles in the Red Sea off the Saudi port city Jeddah, Iran’s state television reported, quoting the National Iranian Oil Company (NIOC) which owns the vessel.

The tanker suffered heavy damage and crude leaked after it was struck 96 km from Jeddah, Iranian media reported. State-run IRNA agency said the oil leak was under control.

The alleged attack is the latest incident involving oil tankers in the Red Sea and Gulf region and is likely to ratchet up tensions between regional foes Iran and Saudi Arabia.

The Red Sea is a major global shipping route for oil and other trade, linking the Indian Ocean with the Mediterranean via the Suez Canal. Crude prices jumped on the news and industry sources said it could drive up already high shipping costs.

There was no immediate claim of responsibility. Saudi Arabia had no immediate comment.

The US Navy Fifth Fleet, which operates in the region, was aware of media reports about the tanker, but did not have any further information.

Tensions with the United States have been high since Washington withdrew from a deal between world powers and Iran aiming to rein in Tehran’s nuclear ambitions. US sanctions slashed Iranian oil exports on which Tehran relies.

Responding to Friday’s incident, a China Foreign Ministry spokesman said Beijing hoped all parties would work to uphold peace and stability in the region. China is the top buyer of Iranian oil.

PRICE JUMP

Iran’s ISNA news agency cited a source saying the Iranian tanker was struck in a “terrorist” attack. Iran’s state television reported two of the ship’s tanks were damaged.

The incident follows strikes on key Saudi oil installations in September and attacks on tankers in the Gulf area in May and June. The United States blamed Iran, which denied any role.

Oil prices climbed 2% after reports of the tanker explosion, with benchmark Brent and US West Texas Intermediate crude futures rising more than $1 a barrel.

NIOC identified the ship as Sabiti, a Suezmax vessel, after initial reports said it was the Sinopa, another Suezmax ship. Refinitiv ship tracking data gave the Sabiti’s last reported position off Iran’s southern coast in the Gulf.

Iran’s Nour news agency, close to the Iranian Revolutionary Guard Corps, said the ship crew was safe.

The September 14 attacks on Saudi oil sites in the east of the kingdom shut down 5.7 million barrels per day (bpd) of production, about half of Saudi output and roughly five percent of global supply. Output has since been restored.

Yemen’s Iran-aligned Houthi group claimed responsibility with a US official saying they originated from south-western Iran. Riyadh blamed Tehran. Iran denied any role.

Industry sources said Friday’s incident could drive up shipping costs, which surged.

“War risk insurance premiums for the Red Sea will now likely go up significantly, as will likely freight rates,” said Ashok Sharma, managing director of shipbroker BRS Baxi in Singapore.

Tanker rates soared to multi-year highs in recent weeks after US sanctions on units of Chinese shipping giant COSCO and after the Saudi oil site attacks.



Disruption to shipping through Red Sea would affect oil passing through the Suez Canal or SUMED crude pipeline, which has capacity for 2.34 million bpd and runs parallel to the canal. It is used by tankers that cannot navigate the waterway.