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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden

Oil price jumps after Gulf of Oman tanker 'attacks' - as it happened

An oil tanker on fire in the sea of Oman today.
An oil tanker on fire in the sea of Oman today. Photograph: AP

Ellie Geranmayeh of the European Council on Foreign Relation points out that the Middle East doesn’t look safer since the White House ripped up the Iranian nuclear deal.

Here’s another video clip of one of the tankers:

Summary: Oil jumps after tanker attacks

Time for a quick catch-up.

Oil prices have spiked after two vessels were seemingly attacked in the Gulf of Oman, one of the world’s most important shipping lanes, today.

The Front Altair and the Kokuka Courageous were both hit this morning, forcing their crews to be evacuated. Mapping data shows that both ships suddenly halted this morning.... a month after a similar attack on four boats in the area.

Video footage and photos show fire and smoke erupting from one of the two ships.

Still image taken from a video appears to show two tankers at sea, one of which has a large plume of dark smoke in the Gulf of Oman

No-one has claimed responsibility for the attacks, but a US official has claimed that Iran was ‘highly likely’ to be behind them.

Iran, though, insists that it isn’t to blame - calling the attacks more than suspicious.

President Hassan Rouhani said in a speech on Iranian TV:

“Security is of high importance to Iran in the sensitive region of the Persian Gulf, in the Middle East, in Asia and in the whole world.

We have always tried to secure peace and stability in the region.”

The UN has condemned the attacks.

Fears of military conflict between Washington and Tehran sent the oil price up over 4.5%, with Brent crude hitting $62.64 per barrel and US crude touching $53.45. This is dragging oil away from the five-month lows struck last night.

Middle Eastern stock markets also fell, with the Saudi exchange shedding 1.5%, and Oman and Dubai both down over 1%.

Here’s our latest news story on the attacks:

UN chief condemns attacks

United Nations Secretary-General Antonio Guterres has strongly condemned today’s attacks.

Guterres warned that the world cannot afford “a major confrontation in the Gulf region,” adding:

“I strongly condemn any attack against civilian vessels. Facts must be established and responsibilities clarified.”

Fawaz A. Gerges, professor of Middle Eastern politics at the London School of Economics, fears that today’s attacks increase the risk of a military clash between the US and Iran.

Gerges told Bloomberg:

“Even in the absence of ironclad evidence, the U.S. and its allies will point the finger at Iran.

These incidents are a bad omen because they point to a calculated escalation that tells us both sides are hunkering down.”

US official: Iran 'highly likely' to blame

A U.S. defense official has told CBS News that it is “highly likely” that Iran caused today’s attacks.

CBS says:

The official dismissed an Iranian claim to have rescued the crews of both vessels in the Gulf of Oman as “patently false.” He said the USS Bainbridge picked up 21 crew members.

Iran claimed it dispatched search teams that rescued 44 sailors from the two vessels.

The official told Martin he had seen reports that members of one of the tanker crews believed they were hit by a torpedo or a mine, but that he couldn’t confirm those reports.

A U.S. official told Martin that American authorities expected to recover sufficient debris from the attacks to be able to trace them back to their source.

Here’s a video clip of one of the stricken vessels, filmed from another nearby boat.

You can get up to speed on the oil tanker attacks with our Q&A:

Sky News have just shown a couple of photos of one of the two tankers which were struck today:

Oil tanker ‘attacked’ in the Gulf of Oman
Oil tanker ‘attacked’ in the Gulf of Oman

Shipping company Frontline has now reported that “no marine pollution” has been seen from its Front Altair tanker following today’s attack.

Frontline also says the ship’s crew was picked up by another cargo vessel, called Hyundai Dubai, before being transferred to an Iranian naval vessel and being taken to the Iranian port of Bandar Abbas. The crew was made up of 11 Russian citizens, one Georgian, and 11 Philippine nationals, it adds.

Marketwatch have written a handy guide to the Gulf region, explaining why today’s attacks are so important to the world economy.

Here’s a flavour:

Where is the Strait of Hormuz?

The Strait of Hormuz is a narrow waterway that, as noted, links the Persian Gulf with the Gulf of Oman and the Arabian Sea.

At its narrowest point, the waterway is only 21 miles wide, and the width of the shipping lane in either direction is just 2 miles, separated by a two-mile buffer zone.

Why is it important?

Oil tankers carrying crude from ports on the Persian Gulf must pass through the strait. Around 18.5 million barrels a day of crude and refined products moved through it in 2016, nearly a third of all seaborne-traded oil and almost 20% of all oil produced globally, according to the U.S. Energy Information Administration. That makes the Strait of Hormuz the world’s most sensitive oil transportation choke point.

Iran hasn’t said who it thinks is responsible for today’s attacks off its coastline.

But on Twitter, foreign minister Javad Zarif has described the attacks as beyond suspicious:

Here’s the key line from president Rouhani’s speech on Iranian TV:

“Security is of high importance to Iran in the sensitive region of the Persian Gulf, in the Middle East, in Asia and in the whole world. We have always tried to secure peace and stability in the region.”

Newsflash: Iranian president Hassan Rouhani has spoken about the tanker attacks on TV.

He’s said security in the Gulf is a high priority for Tehran.

Oil price climbs higher

Oil is pushing higher, as events in the Gulf of Oman continue to alarm investors.

Brent crude is now up almost 4.5% at $62.64 per barrel, as it continues to bounce back from last night’s five-month lows.

US crude is also up over 4%, at $53.25 per barrel.

Ben Macfarlane, market analyst at utility firm Inspired Energy, has warned that further attacks could drive oil higher yet:

“Additional concerns could see crude oil prices continue to rise over the coming days, as markets respond to the heightened tensions in the region and the risk that access to such a vital supply route could be restricted, with up to a fifth of global oil supply passing through the Gulf of Oman near the Strait of Hormuz.”

Reuters is reporting that oil tanker owners DHT Holdings and Heidmar have suspended new bookings to the Mid-East Gulf, according to ship brokers.

DHT has a large fleet of Very Large Crude Carriers (VLCCs) and Heidmar has a wide range of oil tankers. One source said they had suspended offerings for their Suezmax vessels, capable of carrying 1 million barrels and their VLCCs.

The two companies did not immediately respond to requests for comment.

The AFP newswire have also been told that Front Altair is still afloat, despite today’s attack on the tanker.

They say:

Norwegian tanker Front Altair was still afloat after a reported attack in the Gulf of Oman on Thursday, the chief executive of the company that owns the vessel told AFP, denying reports it had sunk.

“I can confirm that the vessel has NOT sunk,” Frontline chief executive Robert Hvide Macleod wrote in a text message to AFP.

The 23 people who were on board were “all safe”, he added.

The Front Altair and another tanker were reportedly attacked in Thursday’s incident, which sent world oil prices soaring.

Middle East stock markets

Stock markets across the Middle East are sliding today.

Investors are selling stocks, on fears that relations between the US and Iran could deteriorate following today’s attacks.

The Saudi Tadawul has dropped by around 1%. Energy companies are among the top fallers, reflecting fears that supplies could be disrupted. Consumer stocks and industrial companies are also down -- they’d suffer from economic disruption.

Oman’s Muscat stock exchance has also shed 1%, while Dubai’s DFM index has lost 1.1% (led by a sharp fall in consumer stocks).

Stock markets
Stock markets across the Middle East, and beyond, today Photograph: Refinitiv

Updated

Iran’s official state TV service, IRIB, has produced this photo which allegedly shows the crude oil tanker Front Altair on fire in the Gulf of Oman today.

It’s come to us via the EPA news photo agency.

Crude oil tanker on fire in Gulf of Omanepa07645178 A handout photo made available by Iran’s official state TV (IRIB) allegedly shows the crude oil tanker Front Altair on fire in the Gulf of Oman, 13 June 2019. According to the Norwegian Maritime Authority, the Front Altair is currently on fire in the Gulf of Oman after allegedly being attacked and in the early morning of 13 June between the UAE and Iran. EPA/IRIB NEWS HANDOUT BEST QUALITY AVAILABLE. MANDATORY CREDIT. HANDOUT EDITORIAL USE ONLY/NO SALES

Theresa May’s spokesman has told reporters that Britain is “urgently seeking” the facts behind today’s suspected attacks on two tankers in the Gulf of Oman.

Financial investors around the globe are closely watching developments in the Middle East today, says Mihir Kapadia, the CEO of Sun Global Investments:

He warns that any US retaliation to today’s tanker attacks could spook the markets (probably sending oil prices even higher).

Tensions in the Middle-East have been rising since President Trump withdrew from the Iran deal last year, and this will certainly impact oil prices in the coming days as more developments come in.

Although U.S. National Security Adviser John Bolton has accused Iran of a similar incident before, the country has distanced itself from today’s attacks.

From this, the biggest concern will be a retaliation which could leave markets looking shaky in the meantime, with Iran potentially being met with more severe sanctions which could really affect its oil output and economy if found guilty.”

Dubai-based journalist Katie McQue has more details of the tankers:

Updated

Cailin Birch, global economist at The Economist Intelligence Unit, fears today’s attacks could deepen the tensions between Washington and Tehran.

It remains unclear who the actors are behind the recent spate of tanker attacks in the Gulf of Oman. Iranian authorities will continue to deny responsibility, either directly or indirectly through proxies. Houthi rebels fighting Saudi forces in Yemen are also suspected of being behind the attacks.

Given the lack of clear information, there is a risk that the US government will interpret the recent attacks as a potential sign of Iranian aggression in the region; the national security advisor, John Bolton, indicated as much after the attacks that occurred last month.

US-Iran tensions are already running high as Iran’s deadline to stop complying with some aspects of its nuclear agreement, unless European countries help it to maintain exports, approaches in the next 30 days.

Shipping company Frontline has denied Iranian media reports that its Front Altair tanker has sunk, following today’s suspected attack.

Updated

The UK government has said it is deeply concerned by reports of explosions and fires on vessels in the Strait of Hormuz.

Reuters has more details:

Shipping firms and industry sources said two oil tankers were hit in suspected attacks in the Gulf of Oman and the crews have been evacuated, a month after a similar incident in which four tankers in the region were struck.

“We are deeply concerned by reports of explosions and fires on vessels in the Strait of Hormuz. We are in contact with local authorities and partners in the region,” as British government spokeswoman said.

Map: Where today's incidents took place

US crude oil prices have also risen sharply, as traders fret about disruption to supplies from the Middle East.

Light sweet crude oil on the NYMEX exchange has jumped 3% to over $53 per barrel.

The owner of Front Altair, Frontline, have said that their vessel is still on fire in the Gulf of Oman.

Full story: Two tankers 'hit by blasts' in Gulf of Oman

Here’s our diplomatic editor Patrick Wintour on today’s drama:

The US Navy’s fifth fleet says it is assisting two damaged oil tankers reportedly hit by explosions off the coast of the United Arab Emirates near the strategic Strait of Hormuz.

Reports of the explosions in the Gulf of Oman originally came from the same Hezbollah-linked news agencies in Lebanon that correctly reported attacks on four tankers docked off the coast of the UAE last month.

The tankers in distress were the Marshal Islands-flagged Front Altair and the Panama-flagged Kokuka Courageous. Managers for the Panama shipping firm said 21 crew members had been evacuated, and the cargo of methanol was intact.

The United Kingdom Maritime Trade Operations, which is part of the Royal Navy, had earlier said that it was aware of an incident. The UK and its partners are currently investigating, the group said.

Here’s Patrick’s full story:

This map from Bloomberg TV shows where today’s suspected attacks took place - and also May’s suspected attack which the US blamed on Iran.

The Gulf of Hormuz
The Gulf of Hormuz Photograph: Bloomberg TV

Iran’s state media are reporting that Iranian rescue vessels have rescued 44 crew members from the Kokuka Courageous and the Front Altair.

Japan’s trade ministry has weighed in:

Co-incidentally, Japan’s prime minister Shinzo Abe is visiting Iran today- the first such visit by a Japanese premier since the 1979 Islamic revolution.

Abe has met Ayatollah Ali Khamenei today- according to this tweet from Iran’s supreme leader.

As you can see, Brent crude spiked sharply this morning when news that two tankers were in trouble in the Gulf of Oman reached the City:

Brent crude oil
Brent crude oil Photograph: Refinitiv

Updated

Here’s what we know so far, via Marketwatch:

Geopolitical tensions jolted the oil price on Thursday. Media reports said a tanker in the Gulf of Oman had sent a distress signal after being attacked and was on fire, while Bloomberg reported a second tanker had also been attacked after both had sailed from Saudi Arabia.

United Kingdom Maritime Trade Operations, an arm of the Royal Navy, said it was investigating the incident after Iranian media also reported explosions in the area, the Associated Press reported. The U.S. Navy was aware of the incident, Bloomberg reported.

Today’s suspected attacks come a month after four ships were attacked outside the Strait of Hormuz (between UAE and Iran).

Here’s a map (from last month):

Last month's attacks also raised geopolitical worries

U.S. National Security Adviser John Bolton claimed two weeks ago that Iran was almost certainly responsible for the attacks, without presenting evidence to back up the claim.

Iran, though, blamed “adventurism” by foreign players to disrupt maritime security.

The incidents come amid rising geopolitical tensions in the region. President Trump has pulled out of the multinational nuclear pact with Iran and reimposed fresh sanctions on its economy, including a ban on oil sales.

Updated

US Navy ships are racing to the two stricken tankers to help, as the financial markets continue to push the oil price up.

Here’s the official statement from the owner of the Kokuka Courageous, Bernhard Schulte Shipmanagement:

Updated

Fortunately, there are reports that the crews of the two tankers are safe.

MAP: Two tankers hit in the Gulf

Iranian media are reporting that TWO tankers have been hit in the Gulf of Oman.

The Financial Times has more details:

Iran’s Arabic TV al-Alalam reported that Pakistan’s local authorities also confirmed that the sound of explosions were heard.

Shipping executives have been circulating messages on Thursday morning saying that oil tanker M.T Front Altair had been abandoned, with its crew safely rescued by a nearby vessel, and that it was fully loaded and on fire.

The fire on Front Altair was caused by a “surface attack”, one of the messages said. The messages also said that a second tanker in the vicinity, Kokuka Courageous, could not be contacted, with its automatic identification system having gone offline.

I’ve dug into our Reuters terminal -- and found the two tankers.

As you can see, Front Altair took a sudden diversion to the south this morning, presumably when the incident took place.

Maps of Gulf of Oman
Maps of Gulf of Oman Photograph: Refinitiv

Updated

Bloomberg is reporting that the tanker fire is being blamed on an “attack”.

News that a tanker has caught fire in the Gulf of Oman is fuelling fears of geopolitical unrest in the region.

Neil Wilson of Market.com explains:

Oil has shot up sharply after slumping to 5-month lows overnight. Reports of an oil tanker being on fire in the Sea of Oman rattled markets and sent Brent up $2 in a matter of minute, but await to see whether this will hold or is an algo-based kneejerk that will be faded.

We know that geopolitical tensions in the region are worsening and raise supply-side concerns in terms of short-term outages etc – but with OPEC already curbing output and US production at a record high the market is far less susceptible to a shock.

Updated

Oil jumps after Gulf of Oman incident

Newsflash: The oil price has just surged on reports that a tanker in the Gulf of Oman is on fire.

Details of the incident are sketchy, beyond that it happened near the Iranian coast.

But markets are reacting fast. Brent crude has surged over 3% to $62 per barrel, having hit a five-month low below $60 last night.

What chartered surveyors say about Brexit

This month’s survey of Britain’s chartered surveyors is peppered with references to Brexit - here’s a round-up of comments:

Paul McSkimmings of Edward Watson Associates in Newcastle upon Tyne,

Good month with expected levels of instructions despite continuing uncertainty due to Brexit. I am still expecting a significant drop in work if Brexit eventually staggers over the line

Jonathan Milner of Paisley Properties in Huddersfield

Usual Easter bump continues. Demand remains strong, no Brexit jitters on the whole. Level second hand stock coming to market, whilst new build is increasingly popular.

Ben Hudson of Hudson Moody in York:

A realisation that Brexit will rumble on for ever has meant buyers and sellers are starting to make decisions to move.

James Brown of Norman F Brown in Richmond:

The shortage of new property on the market continues however following the Brexit postponement, buyers seem to have reacted positively and some properties are selling quickly at good prices.

Andrew W York of Moore & York in Leicester:

Upturn in sales during the second half of the month, but will this continue with all the political/ Brexit uncertainty?

Updated

Simon Rubinsohn, RICS Chief Economist, says today’s survey shows the UK housing market is recovering.

But even though RICS sees prices recovering, Brexit is still a concern, he says:

“Some comfort can be drawn from the results of the latest RICS survey as it suggests that the housing market in aggregate may be steading. However much of the anecdotal insight provided by respondents is still quite cautious, reflecting concerns about both the underlying political and economic climate.

Rubinsohn also warns that some house-prices sellers are demanding too much for their homes, helping to bung the market up:

“Another significant point made by respondents is that there continues to be considerable emphasis on the need for realistic pricing on the part of vendors, which while not a new story, is indicative of the ongoing challenges.

Introduction: Housing market picking up after Brexit delay

Selling advertising board outside home.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The Brexit storm clouds that have loomed over Britain’s economy for many months appears to be clearing.

A new survey of chartered surveyors shows that the housing sector recovered its nerve in May. Prices picked up on relief that the UK hadn’t crashed out of the EU without a deal this spring.

The Royal Institution of Chartered Surveyors (RICS) house price measure - the difference between members reporting price rises and falls - improved to -10 from -22 in April.

That was its highest reading since October and was stronger than the City expected. It suggests that the steady downward pressure on house prices may be easing.

UK housing market
UK housing market Photograph: RICS

London’s housing market has taken the biggest hit from Brexit since 2016, but there are also sign that the long slump in the capital’s housing market may have bottomed out.

RICS says:

  • New buyer enquiries steadier in May following recent declines
  • South East now showing most negative sentiment on prices as London starts to bounce back
  • Indicators on sales, prices and new instructions remain slightly negative, but less than previously
  • Expectations point to a gradual improvement in activity over the next twelve months
UK housing market

Reaction to follow...

Also coming up today

We’ll be tracking events at Arcadia, after Philip Green finally persuaded his landlords to agree hefty rent cuts to keep the company running.

On the economic side, we get new eurozone factory output data and the latest US weekly jobless total.

In the City, supermarket chain Tesco is reporting its financial results - UK sales rose 0.4% in the last quarter, down from 1.7% growth, in a “subdued market”, it says.

The agenda

  • 8.30am BST: Swiss central bank interest rate decision
  • 10am BST: Eurozone industrial production for April
  • 1.30pm BST: US weekly unemployment figures

Updated

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