Oil prices jumped early on Friday after Iran said that explosions hit one of its oil tankers off the Saudi port city of Jeddah in the Red Sea, damaging the vessel and causing an oil spill that has already been contained.
The price of oil jumped by more than 2 percent as early reports about the explosions started to trickle in. As of 07:00 a.m. EDT on Friday, WTI Crude was up 1.7 percent at US$54.46 and Brent Crude was trading up 1.52 percent at US$60.00, as the geopolitical risk returned to the market.
According to the Islamic Republic News Agency (IRNA), an Iranian tanker, Sabiti, was hit by missiles in the Red Sea early on Friday morning local time. The vessel, which belongs to the National Iranian Oil Company (NIOC), sustained damages to its two major tanks and oil spilled into the sea, according to IRNA. All crew members are safe on board, the news agency said. The tanker is in a stable condition, there is no fire on board, and the oil leak has been stopped, IRNA reported in a later update.
Iran’s foreign ministry confirmed on state television that the tanker Sabiti was damaged in an attack in the Red Sea.
"Those behind the attack are responsible for the consequences of this dangerous adventure, including the dangerous environmental pollution caused," Reuters quoted Foreign Ministry spokesman Abbas Mousavi as telling Iranian state TV.
This latest incident in the Middle East highlights the increased tensions in the waters surrounding some of the largest oil producing countries in the Middle East. Iran has been recently implicated in several such incidents on the eastern coast of Saudi Arabia—in the Persian Gulf and in the most important oil shipping lane in the world, the Strait of Hormuz.
Tensions in the region further escalated in mid-September with an unprecedented attack on critical onshore oil infrastructure in Saudi Arabia, the world’s top oil exporter and regional rival of Iran.
By Tsvetana Paraskova for Oilprice.com
