Oil jumps more than 3% on reports of tanker incident in the Gulf of Oman off Iran coast – CNBC

Brent crude spiked as high as 4% on Thursday morning on reports of tanker explosions in the Gulf of Oman near the Iranian coastline, but later pared gains to trade 2.88% higher at $61.70 a barrel.

Tankers the Front Altair and the Kokuka Courageous have sustained significant fire damage and its crews have been evacuated, according to multiple shipping agents and chartering sources. The Kokuka Courageous, a chemical tanker that loaded in Saudi Arabia and was en route to Singapore, caught fire at the same time as the Front Altair just before 6:00 a.m. local time.

The cause of the fire remains unclear, but has sparked fears of attack and comes just weeks after alleged ship sabotage in the region.

A representative for BSM Ship Management, the Kokuka’s Singapore-based manager, said 21 crew had abandoned ship due to the “security incident”, which damaged the ship’s starboard hull. They were rapidly rescued from a lifeboat by a nearby vessel, according to the company’s spokesman.

“The Kokuka Courageous remains in the area and is not in any danger of sinking. The cargo of methanol is intact,” the spokesman said in a statement.

The ship is roughly 14 nautical miles off the coast of Iran and 70 nautical miles from the coast of the United Arab Emirates’ Fujairah, which was the site of alleged sabotage attacks on four tankers in mid-May that U.S. authorities have blamed on Iran. Iran denies any involvement.  

When four tankers sustained damage in the attacks of May 12 — two Saudi-owned, one from the UAE and one from Norway — crews did not have to abandon ship, indicating that today’s attack is much more serious. 

Fujeirah Port operations are normal, according to a Platts Global Alert citing shipping sources.

The Front Altair was scheduled to carry a cargo of naptha, a petrochemical feedstock, from the Persian Gulf to Japan, Platts said. Its owner, Frontline, could not be immediately reached for comment.

Neither ship was under Saudi charter, and the Front Altair and Kokuka Courageous were bearing Marshall Islands and Panama flags, respectively.

United Kingdom Maritime Trade Operations, a division of the U.K. Royal Navy, said it is currently investigating the incident and has urged “extreme caution” amid mounting tensions between Iran and the U.S.  

Iranian state media has reported that two oil tankers were targeted in explosions, without providing evidence.

CNBC has reached out to maritime authorities for more details.

A spokesman for the US Navy’s Fifth Fleet in Bahrain told the Associated Press that his command was “aware” of the incident and was seeking further details. U.S. Naval ships are in the area and are “rendering assistance” after forces in the region received two separate distress calls, the Fifth Fleet said.

This is a breaking news story, please check back for more.

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