Two oil tankers attacked in Gulf of Oman

Attacks on two oil tankers in the Gulf of Oman risk escalating conflict in the Middle East. It has already resulted in an increase in the price of oil.

Reuters: Tanker attacks in Gulf of Oman stoke fears over conflict and oil

Two oil tankers were attacked on Thursday and left adrift in the Gulf of Oman, driving up oil prices and stoking fears of a new confrontation between Iran and the United States.

The White House said President Donald Trump had been briefed and that the U.S. government would continue to assess the situation. Washington accused Tehran of being behind a similar attack on May 12 on four tankers in the same area, a vital shipping route through which much of the world’s oil passes.

Tensions between Iran and the United States, along with its allies including Saudi Arabia, have risen since Washington pulled out of a deal last year between Iran and global powers that aimed to curb Tehran’s nuclear ambitions.

Iran has repeatedly warned it would block the Strait of Hormuz, near where the attacks happened, if it cannot sell its oil due to U.S. sanctions.

No one has claimed Thursday’s attacks and no one has specifically blamed them on any party.

Reuters:  U.S. calls attacks on commercial shipping ‘unacceptable’

The United States on Thursday called attacks on commercial shipping “unacceptable” and told the U.N. Security Council that the latest assaults on two oil tankers in the Gulf of Oman that left one ablaze and both adrift “raise very serious concerns.”

That’s stating the obvious.

“It’s unacceptable for any party to attack commercial shipping and today’s attacks on ships in the Gulf of Oman raise very serious concerns,” acting U.S. Ambassador to the U.N. Jonathan Cohen told a council meeting on U.N. and Arab League cooperation on Thursday morning.

“The U.S. government is providing assistance and will continue to assess the situation,” he said.

U.N. Secretary-General Antonio Guterres warned at the meeting that the world cannot afford “a major confrontation in the Gulf region.”

Kuwait’s Foreign Minister Sheikh Sabah Khaled al-Sabah described the tanker attacks as a threat to international peace and security.

“This is the most recent event in a series of acts of sabotage that are threatening the security of maritime corridors as well as threatening energy security of the world,” he said.

Maybe some tariff threats will sort this out.

Last August: The US has reimposed sanctions on Iran. 

When President Donald Trump withdrew the United States from the Iran nuclear deal in May, he also said the US would reimpose strict sanctions on Tehran.

Starting at 12:01 am on Tuesday, financial penalties that former President Barack Obama removed from Iran as part of the nuclear agreement snap back into place.

On November 4, even more sanctions that Obama lifted will kick back in. Those will hit Iran’s oil exports and energy sector, a key industry for the country; financial institutions working with the Central Bank of Iran; port operators and shipbuilding sectors; and the provisions of insurance and financial messaging services.

Or not.

The goal of the sanctions, according to the senior administration officials, is to cripple the Iranian economy to the point that the regime must end its support for terrorism and negotiate an end to its nuclear program with the US.

Another possibility was an escalation in tensions and unintended consequences.

Reuters:  Latest on tanker attacks south of Strait of Hormuz

Here is the latest from Reuters on attacks on two tankers on Thursday south of the Strait of Hormuz, through which almost a fifth of the world’s oil is shipped:

* Panama-listed tanker Kokuka Courageous was damaged in a “suspected attack” that breached the hull above the water line, Bernhard Schulte Shipmanagement said

* The ship was attacked twice in three hours before all the crew were evacuated, the president of Japanese owner Kokuka Sangyo told reporters

* There had been an engine room fire on the tanker, which was carrying a cargo of methanol from Saudi Arabia to Singapore

* A second ship, the Marshall Islands-flagged Front Altair, was “suspected of being hit by a torpedo” at around 0400 GMT, said Taiwanese refiner CPC Corp, which had chartered the vessel

* The Aframax-class tanker loaded with 75,000 tonnes of naphtha was on fire, said Norwegian owner Frontline

* Frontline said the Front Altair was afloat, denying a report by Iran’s IRNA news agency that it had sunk

Oil and the Middle east have long been problems that have been short on effective solutions.