Oil prices are surging this morning after an Iranian oil tanker was hit with a missile attack in the Red Sea near Saudi Arabia, the latest in a series of attacks on ships carrying crude in the region.
Iran initially blamed Saudi Arabia for the attack, which caused an oil spill and sent prices up as much as 2.6%, but later withdrew that claim. The offensive comes just a couple of weeks after another major attack on two Saudi oil fields that the kingdom blamed on Tehran.
Pressure in the region have been steadily rising since U.S. President Donald Trump pulled out of the Iran nuclear agreement and imposed strict sanctions on the country. Iran has talked big but no one has come out explicitly in favor of starting a war. Bubbling tensions have raised the risk to the world’s oil supply, though, causing prices to surge.
“The market has been entirely too complacent given that we are one security incident away from a war,” RBC Capital Markets Chief Commodities Strategist Helima Croft told Bloomberg.
The tanker, named Sabiti, has the capacity to carry one million barrels of crude oil and was attacked near the Saudi Arabian port of Jeddah after being hit by missiles between 5:00 and 5:20 a.m. local time. Two of the ship’s main oil tanks were damaged, causing a spill, according to the Islamic Republic News Agency.
The ship was reportedly hit twice within 30 minutes and the National Iranian Tanker Company first said the missiles probably came from Saudi Arabia before later withdrawing the claim.
Saudi Ports Authority confirmed the hit occurred but could not confirm the nationality of the ship, according to a Saudi press officer.
The Iranian oil ministry’s Shana news service said the spill had been contained but that oil was again flowing into the Red Sea. The ship’s destination was an Iranian island in the Strait of Hormuz called Larak.
Oil prices jumped to more than $60 a barrel in London this morning.
