An alleged attack Thursday on two oil tankers near the Strait of Hormuz may increase levels of risk in the Middle East’s key crude supply and shipping artery. The Front Altair and the Kokuka Courageous were carrying cargoes including naphtha when the incident occurred. Television footage later showed one of the tankers engulfed in flames. The incident follows last month’s attack on four tankers near the bunkering port of Fujairah on May 12.
US Secretary of State Mike Pompeo blamed Iran Thursday for the attack on the two tankers, as well as attacks a month earlier on pipelines in Saudi Arabia and on ships in nearby waters off Fujairah. Pompeo said the US would raise the attack to the United Nations’ Security Council. “The details remain unclear at the time of writing, but the attacks fit Iran’s recent pattern of reacting to tightening US sanctions,” said Paul Sheldon, chief geopolitical adviser with S&P Global Platts Analytics.
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“A direct US/Iran conflict (or shutdown of the Strait of Hormuz) both remain long shots, due to Iran’s fear of US military action and the US administration’s clear aversion to foreign entanglements. But the risk of miscalculation in the Middle East is clearly rising, which will increase the demand for inventory as oil balances tighten in 2H19,” he added.