- Attacks on tanker ships near the world’s busiest sea lane for oil shipments send oil prices sharply higher, partially reversing a deep slump in crude futures.
- Tankers the Front Altair and the Kokuka Courageous have sustained significant damage in the Gulf of Oman, and their crews have been evacuated.
- The strikes come against a backdrop of heightened tension between the U.S. and Iran and follow last month’s attacks on four tanker ships in the Middle East.
According to an article published in CNBC, oil prices rose as much as 4% on Thursday following attacks on two tanker ships off the coast of Iran that renewed fears of conflict in the Middle East after a series of strikes last month.
What happened?
The vessels Front Altair and the Kokuka Courageous sustained significant damage and their crews have been evacuated, according to shipping agents and chartering sources. The attacks occurred in the Gulf of Oman, near the Strait of Hormuz, the world’s busiest sea lane for oil shipments.
Increase in oil prices
U.S. West Texas Intermediate crude settled $1.14 higher at $52.22, gaining 2.2% on the day after topping out at $53.45 earlier in the session. Brent crude, the international benchmark for oil prices, rose $1.34, or 2.2%, to $61.31 per barrel. Brent earlier
rose as high as $62.64.
OPEC’s oil forecast
Earlier Thursday, oil prices fell toward five-month lows, continuing a steep slide fueled by concerns that the U.S.- China trade war will slow global growth and dent fuel demand. On Wednesday, crude futures fell 4% on the ongoing demand fears and another big jump in U.S. crude stockpiles.
OPEC on Thursday cut its forecast for oil demand growth in 2019 as the 14-nation producer group pumped at its lowest level in five years. But the attacks in the Gulf of Oman renewed geopolitical concerns that have largely abated in recent weeks. “This is the kind of nightmare headline that you don’t necessarily want to wake up to,” John Kilduff, founding partner at energy hedge fund Again Capital, told CNBC’s “Squawk Box.”
Investigation initiated
The Iranian navy is investigating the incidents, according to state-owned news agency IRNA. The crew aboard one of the ships, the Front Altair, were initially picked up by a nearby ship, but were transferred to an Iranian rescue vessel and brought to a port in southern Iran, according to IRNA.
The crew aboard the other ship, the Kokuka Courageous, was brought aboard the U.S.S. Bainbridge, the Associated Press reported. U.S. naval ships provided assistance after forces in the region received two separate distress calls, the U.S. Navy’s Fifth Fleet in Bahrain said.
Piecing together the attacks
Details of the incidents were still emerging on Thursday from companies that own, manage and charter the ships. The chemical tanker Kokuka Courageous suffered a breached hull above the water line during a “suspected attack,” Reuters reported, citing Cyprus-based Bernhard Schulte Ship management. The tanker was loaded with a cargo of methanol in Saudi Arabia and was en route to Singapore.
A representative for BSM’s Singapore office said 21 crew had abandoned ship due to the “security incident,” which damaged the ship’s starboard hull. They were rapidly rescued from a lifeboat by a nearby vessel, according to the company’s spokesman.
“The Kokuka Courageous remains in the area and is not in any danger of sinking. The cargo of methanol is intact,” the spokesman said in a statement.
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Source: CNBC
