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Iran threatens to seize British oil tanker

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK

A senior commander in Iran’s Revolutionary Guard threatened to seize a British oil tanker on Friday, after British forces intercepted an Iranian vessel on Thursday.

The British Royal Marines were on Thursday involved in an operation to seize a supertanker suspected of carrying oil destined for Bashar Assad’s Syrian regime. The operation took place near the overseas British territory of Gibraltar.

Iran summoned the British ambassador to Tehran following the tanker seizure and on Friday Revolutionary Guards Major General Mohsen Rezaee said Iran had a “duty” to seize a British tanker if the Iranian vessel wasn’t released.

“The Islamic Revolution has has never initiated hostilities in any battles in its 40-year history, but it has also never hesitated in responding to bullies,” Dr. Rezaee tweeted.

“If Britain does not release the Iranian oil tanker, it is the authorities duty to seize a British oil tanker.”

A British Royal Navy patrol vessel guards the oil supertanker Grace 1, that's suspected of carrying Iranian crude oil to Syria. Photo: REUTERS/Jon Nazca

Oil prices were falling on Friday despite flaring tensions. The price of crude oil futures (CL=F) was down 1.2% to $56.62 at 1.50pm UK time on Friday. The price of Brent oil futures (BZ=F) was down 0.7% to $63.38 at the same time.

Dr. Rezaee’s threat adds to recent flaring geopolitical tensions in a key shipping route for global oil supply in recent weeks.

Two oil tankers were attacked near Iranian waters in the Gulf in the middle of June. The US accused Iran of being responsible for the attacks, an accusation Iran denies. The US deployed 1,000 extra troops to the region in response to what it called “hostile behaviour.”

Iran then shot down a US drone it claimed was flying in its airspace shortly after the tankers were attacked. US president, Donald Trump, reportedly ordered military strikes on Iran in response before changing his mind.

Multiple commercial airlines have stopped flying over Iranian airspace in response to the drone attack.

The region is crucial to the global oil trade as the Strait of Hormuz between Iran and Oman is the only sea passage to the open ocean from the Persian Gulf.

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Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.

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