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Oil prices jump after Iranian oil tanker damaged by explosions near Saudi Arabia

(Representative Image) Photograph:( Reuters )

AFP Jeddah, Makkah, Saudi Arabia Oct 11, 2019, 03.33 PM (IST)

Oil prices surged more than two per cent Friday after an Iranian tanker was hit by suspected missile strikes near Saudi Arabia, sparking fresh supply concerns with tensions already high after last month's attacks on two Saudi crude facilities.

The National Iranian Tanker Company, which owns the ship, said the hull of the Sabiti was hit by two separate explosions off the Saudi coast, saying they were "probably caused by missile strikes".

The news sent Brent surging 2.3 per cent to $60.46, while West Texas Intermediate jumped 2.1 per cent to $54.69. Prices had already been rising on growing hopes for a breakthrough in the China-US trade talks.

The blasts come just weeks after two of Saudi Arabia's biggest oil installations were hit, wiping out five per cent of global production. That caused a record rise in prices for both main contracts, though they have since subsided.

They will also revive concerns about the security of the world's crude supplies as tensions in the tinderbox Gulf region are already high, with Riyadh and the United States accusing Iran of being behind last month's attacks.

Tehran-back Huthi rebels in Yemen have officially claimed responsibility.

Tensions have been running high for months with ships attacked in the region, drones downed and oil tankers seized.

Story highlights

The blasts come just weeks after two of Saudi Arabia's biggest oil installations were hit, wiping out five per cent of global production.