Oil Tankers Attacked Off Iraq as Middle East Crisis Worsens

(Bloomberg) — Two oil tankers were hit in Iraqi waters, the latest in a string of attacks on ships in the Persian Gulf that are raising risks to global energy supply from the deepening Middle East war.

The strikes on the vessels off the coast of Iraq prompted the nation’s oil terminals to suspend operations. The latest developments point to an increase in retaliatory action from Iran, adding to pessimism that the conflict will persist for longer.

Most Read from Bloomberg

Attacks on vessels have intensified in recent days. The UK Maritime Trade Operations said on Thursday that a ship was struck by an unknown projectile just north of Jebel Ali in the United Arab Emirates, while a spokesperson for the Thai Navy said a cargo vessel was hit on Wednesday. The Thai-flagged Mayuree Naree — a 30,000 deadweight-ton bulk carrier — was attempting to exit Hormuz at the time.

Iraq’s State Organization for Marketing of Oil, or SOMO, said the tankers hit in its territorial waters were the Marshall Islands-flagged Safesea Vishnu and the Malta-flagged Zefyros. The country stopped operations at its oil terminals, according to comments from the director of the General Company for Ports of Iraq, carried by Iraqi News agency.

“This event negatively impacts Iraq’s security and economy, and poses a threat to the safety of maritime navigation and oil activities in Iraqi territorial waters,” SOMO said in a statement.

Ships were also ordered to leave the Mina Al Fahal oil terminal in Oman as a precautionary measure. The port was reopened after several hours, with operations and loadings now continuing as usual, according to an emailed statement from the Gulf Mercantile Exchange. Still, the evacuation at Mina Al Fahal, which sits outside of the Strait of Hormuz, shows how the conflict is expanding to threaten the few ports from which Middle Eastern oil can still be shipped.

Disruptions in Oman raises “fears over broader regional supply,” said Warren Patterson, head of commodities strategy at ING Groep NV. “The market will have to start worrying about more than just Strait of Hormuz oil flows.”

Global benchmark Brent crude surged as much as 10% on Thursday as the crisis deepened, with even news of a historic 400-million-barrel release of reserves coordinated by the International Energy Agency unable to cool the rally. The record size of the drawdown may have spooked some investors, given the war has been going less than two weeks.