Financial news

Oil rallies after report of explosion on Iranian tanker

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Via Financial Times

An explosion has set an Iran-owned oil tanker on fire near Saudi Arabia’s port city of Jeddah causing an oil spill, local media reported early on Friday morning.

Tasnim news agency, close to Iran’s Revolutionary Guards, said on Friday that the tanker belonged to the National Iranian Tankers Company and that it was 60 miles off the Saudi port of Jeddah.

“Technical experts on board are looking into the reasons behind the explosion but they think it is was a terrorist attack,” the news agency said. “The tanker is currently in a stable situation . . . and the crew are safe.”

Iranian officials did not immediately comment on the report. Shana, the news agency of the oil ministry, denied the tanker was on fire and said the crew managed to curb crude leaking into the sea.

Iranian officials have not commented yet. Brent crude, the international oil benchmark, climbed 2.1 per cent to $60.36 a barrel as traders responded to the event.

The incident comes as the region is on high alert after attacks on vital energy infrastructure in Saudi Arabia — the worst in the kingdom’s history — last month and after months rising tensions in the Gulf.

The US blamed Iran for sabotage attacks on six tankers off the coast of the United Arab Emirates in May and June. Iranian forces shot down a US spy drone in June. The following month, Iran seized a British-flagged tanker in apparent retaliation for the UK’s decision to help detain an Iranian vessel off the coast of Gibraltar.

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TankerTrackers, a ship monitoring company, said it believed the affected tanker was the 1m barrel capacity Sinopa, and added it would be the third Iranian tanker in six months to become incapacitated in this part of the Red Sea.

Iranian tankers sailing towards the Suez Canal are generally suspected of being destined for the Assad regime in Syria, given US sanctions make it difficult for other countries to buy Iranian crude. 

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