Oil futures rise on increasing concerns about supply disruptions in the Middle East after Saudi Arabia says two of its oil tankers were targeted in a “sabotage attack” on Sunday off the coast of Fujairah.
Saudi Arabia’s Energy Minister Khalid al-Falih said in a statement on Monday that the attack did not lead to any casualties or an oil spill but caused significant damage to the structures of the two vessels.
The announcement came a day after the UAE confirmed that four commercial vessels had been targeted by what it called acts of sabotage off Fujairah.
The news sent Brent crude futures to $71.71 a barrel, up $1.09. US West Texas Intermediate (WTI) futures were at $62.45 per barrel, up 79 cents.
Saudi Arabia and the UAE are the largest and third-largest producers, respectively, in the Organization of the Petroleum Exporting Countries (OPEC).
“Reports on Sunday of explosions in Fujairah are likely to add further impetus to a potentially growing risk premium in the region,” Vienna-based consultancy JBC Energy said.
Markets are already under pressure from Washington’s bid to cut Iran’s oil exports to zero and reduce exports from Venezuela.
Falih said one of the two tankers had been on its way to be loaded with crude oil from Saudi Arabia’s Ras Tanura oil terminal in the Persian Gulf for customers in the United States.
The attack, he said, aimed to “threaten the freedom of maritime navigation and the security of oil supplies to consumers around the world.”
The international community has joint responsibility to maintain the safety of maritime navigation and the security of oil tankers, Falih added.
His statement appeared to have been coordinated with the UAE which on Sunday said, “The international community should carry out its responsibilities to prevent any parties trying to harm maritime security and safety, which would be considered a threat to international safety and security.”
The cause of the explosions has not been ascertained and there has been no claim of responsibility, but speculations range from drone or missile attacks from Yemen, to possible dropping of bombs by US forces to ignite tensions in the region.
Iran on Monday voiced concern about “adventurism by foreign players” to disrupt maritime navigation in the Persian Gulf region, describing the incident as “lamentable” and “worrying” and calling for thorough investigations.
Fujairah port is the only terminal in the UAE located on the Arabian Sea coast. The small emirate has an oil terminal and a pipeline that delivers crude oil from Abu Dhabi which sits on the majority of UAE oil reserves.