Two explosions have been reported onboard an oil tanker operated by Iran’s National Oil Company (NIOC) off the coast of Saudi Arabia, an event being pinned as a “suspected missile attack” by Iranian media.
In a statement, NIOC named the vessel as Sabiti, a Suezmax class tanker, after initial newswire reports identified the vessel on fire as another Suezmax in the region – the Sinopa.
The vessel was 60 miles (97km) from the Saudi port city of Jeddah when the incident took place. While the Sabiti’s two main storage tanks have been damaged causing an oil spill into the Red Sea, the crew are reported to be safe, and the fire has been put out, NIOC added.
A Reuters report citing Iranian media said the NIOC claimed the vessel was hit by a “suspected missile attack” causing “two blasts” but did not provide evidence.
Vessel tracking firm TankerTrackers.com said Iranian Suezmaxes were being regularly used to make oil shipments to the Syrian government, despite international sanctions.
The latest flashpoint comes amid rising tensions between Iran and Saudi Arabia following a string of attacks. In May, four tankers were attacked off the port of Fujairah, United Arab Emirates (UAE) in the Gulf of Oman.
These included two Saudi Arabian registered oil tankers, a Norwegian registered oil tanker, and an Emirati registered bunkering ship. In June, two more tankers were attacked in the same maritime corridor raising further alarm.
On September 14, multiple drone and suspected missile attacks hit Saudi Arabia’s crude processing facilities in Abqaiq and the Khurais oilfield, a production site that went on stream in June 2009.
U.S. officials pinned the blame for the tanker attacks as well as drone strikes on Saudi facilities on Iran, and Saudi Arabia did likewise with the Abqaiq and Khurais attacks. However, Iran denied any involvement.
In the wake of the incident, oil futures rose by over 2%, with the Brent December contract trading up 2.25% or $1.33 at $60.43 per barrel and the WTI November contract 2.18% or $1.17 higher at $54.72 per barrel (9:18 BST, Thursday, October 11), but both benchmarks subsequently lost initial gains posted in Asian trading.
That’s after the International Energy Agency (IEA) tempered market sentiment as it lowered its oil demand growth estimates for 2019 by 65,000 barrels per day (bpd) to 1 million bpd, and for 2020 by 105,000 bpd to 1.2 million bpd, in its monthly oil market report.
“We expect growth in 2019 to be the weakest since 2016, following evidence of a slowdown in several major consuming regions and countries, including Europe, India, Japan, Korea and the U.S.,” the IEA said.
The agency added that OECD inventories had risen by 20.8 million barrels in August to 2.974 billion barrels and stood 43.1 million barrels above the five-year average.
The IEA also noted that OPEC crude production fell to a 10-year low of 28.83 million bpd in September, but that it expects non-OPEC growth to continue from Brazil, Canada, Norway and the U.S.
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