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Oil price choppy as Iran suspected of oil tankers attack in Gulf of Oman

·Finance and policy reporter
TOPSHOT - A picture obtained by AFP from Iranian News Agency ISNA on June 13, 2019 reportedly shows fire and smoke billowing from Norwegian owned Front Altair tanker said to have been attacked in the waters of the Gulf of Oman. - Suspected attacks left two tankers in flames in the waters of the Gulf of Oman today, sending world oil prices soaring as Iran helped rescue stricken crew members. The mystery incident, the second involving shipping in the strategic sea lane in only a few weeks, came amid spiralling tensions between Tehran and Washington, which has pointed the finger at Iran over earlier tanker attacks in May. (Photo by - / ISNA / AFP)        (Photo credit should read -/AFP/Getty Images)
A photo from the Iranian News Agency reportedly shows a Norwegian-owned Front Altair tanker attacked in the waters of the Gulf of Oman. Photo: -/AFP/Getty Images

Oil has risen for a second day after spiking on Thursday after the suspected attacks on two oil tankers in the Gulf of Oman.

Brent crude (BZ=F) was up 0.3% to $61.47 as the US claimed Iran was behind the attacks, which fuelled fears of reduced crude flows along one of the world’s busiest shipping routes.

The British government is reported to share US suspicions about Iranian involvement in the explosions, in what is thought to be the second attack in a month in the region.

But oil remains volatile after the incidents near Iran and the Strait of Hormuz pushed up oil prices by up to 4.5% on Thursday, with the price of crude down 0.2% (CL=F) to $52.19 on Friday morning.

The explosions have halted the slide in prices that has rattled the industry in recent weeks amid concerns about global demand levels.

READ MORE: Tensions on the rise over oil tanker attacks as US releases video of ‘Iranian patrol boat’ near vessel

Tehran has denied any involvement in the blasts, which saw three separate detonations on board the Norwegian ship the Front Altair and the Japanese Kokuka Courageous. Dozens of staff were rescued.

"The events in the Gulf would now appear to have taken on an overt military dimension and we are waiting to see what action the U.S. Fifth Fleet and other military resources in the region may take," said Tom O'Sullivan, founder of energy and security consultancy Mathyos Advisory.

Tensions in the Middle East have escalated since U.S. President Donald Trump withdrew from a 2015 multinational nuclear pact with Iran and reimposed sanctions, especially targeting Tehran's oil exports.

An OPEC report yesterday noted: "Throughout the first half of this year, ongoing global trade tensions have escalated. Significant downside risks from escalating trade disputes spilling over to global demand growth remain."

READ MORE: Oil spikes on Thursday after blasts in Gulf of Oman

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