Brent crude prices rose 2.1% to $60.36 a barrel on the news in early morning trading

President Donald Trump meets with the Deputy Crown Prince of Saudi Arabia

Saudi Crown Prince Mohammed Bin Salman will be (pictured) (Credit: White House/Shealah Craighead)

Media in Iran has reported one of the country’s oil tankers moored off the coast of Saudi Arabia was hit by two missile strikes in the early hours of 11 October.

It said the incident has caused a major oil spill in the Gulf at a time when tensions between the Iranian government and its Saudi rivals are running increasingly high, with the latter blaming Iran for 14 drone strikes on two of its key oil facilities last month.

Iran’s national oil company (NIOC), which owns the tanker, denied claims the damage was caused as a result of missile strikes, while investigations to definitively determine the event’s origin are being carried out.

The BBC reported it is common for vessels off the Saudi coast to switch off their automatic identification systems, which track potential incoming missiles, in order to avoid detection that might lead to sanctions or harassment.

Brent crude prices rose 2.1% to $60.36 a barrel on the news in early morning trading.

 

Iran and Saudi Arabia tensions reach new heights following September drone attacks

Saudi Aramco was forced to suspend 5.7 million barrels of crude oil per day after its Abqaiq oil processing plant and the nearby Khurais oil field came under attack from drones on 14 September.

The Houthi group, a Yemen-based terror organisation, claimed responsibility for the attacks which stared fires at the two facilities, but following investigation of the damage Saudi Aramco pointed the finger at Iran.

A total of 10 drones were reportedly used to launch attacks on the facilities located in eastern Saudi Arabia.

Combined, the two plants account for nearly half of Saudi Aramco’s total output, and reportedly meet more than 5% of global oil supply.

The kingdom’s energy minister Prince Abdulaziz bin Salman confirmed on 3 October Saudi oil production had been restored to levels experienced prior to the drone attacks.

At a conference in Moscow, he said production had reached 9.9 million barrels a day, exceeding the 9.8 million barrels a day it averaged prior to the assault.

The rapid recovery did not deter the Saudi Crown Prince Mohammed Bin Salman from calling for “strong” global action to be taken against Iran in order to deter it from making a similar move in the future, however.

In an interview with CBS on 29 September, the Crown Prince claimed global oil markets will suffer from rapidly escalating prices if nothing is done.

He said: “This attack hit the heart of the global energy industry and disrupted 5.5% of the world’s power needs — the needs of the US, China and the whole world.

“This was an act of war — if the world does not take strong and firm action to deter Iran, we will see further escalation that will threaten world interests.

“Oil supplies will be disrupted, and oil prices will jump to unimaginably high numbers that we haven’t seen in our lifetime.”