London — Oil prices rose as high as $60.65 a barrel on Friday after Iranian media said a state-owned oil tanker had been attacked in the Red Sea near Saudi Arabia, but bearish oil demand forecasts soon pulled crude off session highs.
The Iranian Suezmax crude tanker was struck in the Red Sea off Saudi Arabia’s coast on Friday, Iranian media said, with various reports differing on the level of damage caused.
The National Iranian Tanker Company (NITC) said the ship was damaged but stable and denied initial reports it had been set ablaze.
Both oil benchmarks recorded their biggest daily rise since Sept. 16, the first trading day after attacks on Saudi installations knocked out more than half of the kingdom’s crude output and temporarily pushed oil prices up by about 20%.
Friday’s initial boost from the Iranian news wore off as trading continued. Brent crude futures LCOc1 were up 73 cents at $59.83 a barrel by 1349 GMT and U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 62 cents to $54.17.
Iranian oil exports are under U.S. sanctions that have diminished Iran’s impact on the global supply picture.
“The market still has fresh memories of the Saudi Arabia attacks and the very quick price reversals afterwards. The price results of attacks this year have not been sustained in terms of risk premium,” said Petromatrix analyst Olivier Jakob.
“In terms of oil prices, the impact is limited unless you think Iran is going to retaliate in the Strait of Hormuz … It’s going to be more supportive in the freight market. Potentially it can increase insurance premiums (on tankers).”
The United States has issued sanctions on units of Chinese shipper COSCO, alleging involvement in ferrying crude out of Iran, which has boosted rates for oil tankers.
Tensions in the Middle East have escalated in the wake of attacks on tankers and U.S. drones in the Strait of Hormuz, a key shipping artery for the global oil trade.
- Reuters
