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Oil spikes after tankers 'attacked' in Gulf of Oman

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK

The price of oil spiked on Thursday after explosions on oil tankers in the Gulf of Oman.

Brent crude (BZ=F) was up by 3.6% to $62.13 (£48.78) and crude (CL=F) was up by 3.2% to $52.79. It came after reports of two oil tankers in the Gulf of Oman being attacked.

Details of the exact incident are still unclear but multiple international agencies reported two ships being in trouble in the region.

Norwegian ship the Front Altair was “attacked between the Emirates and Iran,” according to the Norwegian Maritime Authority (NMA), which said there were three detonations onboard the ship. The NMA said: “A second tanker, the Kokuka Courageous, has reportedly also been attacked in the same area.”

A spokesman for Taiwan's state oil refiner CPC Corp, which chartered the Front Altair, told the BBC the ship was "suspected of being hit by a torpedo.” Other reports suggested a mine.

The Gulf of Oman, where the incident took place, is located between Iran and Oman. Photo: Google Maps

The US Navy said it was “aware of the reported attack on shipping vessels in the Gulf of Oman” and “ships are in the area and are rendering assistance.” The Navy said it received two separate distress signals.

Iranian news agency Fars said the Iranian Navy had rescued all the crew members of the affected ships. 23 crew were rescued from one of the vessels while 21 were picked up in the sea. Fars said the Front Altiar vessel sunk as a result of damage sustained to its hull.

The price of Brent crude spiked after the two oil tankers ran into trouble in the Gulf of Oman. Photo: Yahoo Finance UK

“The incident this morning comes at a time of heightened geopolitical tensions in the region with US-Iranian relations deteriorating further after attacks on four tankers off the coast of the UAE last month,” David Cheetham, chief markets analyst at trading platform XTB, said.

“This region is particularly important to the crude oil markets with the Strait of Hormuz one of the most important “choke points” for waterborne oil and any further escalation could well cause a significant move higher in the market.”

The Norwegian Maritime Authority on Thursday told its national ships to “exercise extreme caution in the region” and “keep well clear of Iranian territorial waters.”