World oil prices surged on reports that two tankers had been attacked in the Gulf of Oman that can escalate crisis in Syria.
Two vessels — identified as the Marshal Islands-flagged Front Altair and the Panama-flagged Japanese-owned Kokuka Courageous — had been hit in suspected attacks in the Gulf of Oman. The crew had been evacuated by Iranian rescue workers from the ships. The tankers were reportedly loaded with Japan-related petrochemical cargo.
An attack on two oil tankers near the Strait of Hormuz raised fears of a potential disruption to the global flow of oil, but failed to recoup the previous days losses by the close.
West Texas Intermediate crude for July delivery CLN19, +3.32% jumped $1.52, or 3%, to $52.66 a barrel after tapping an intraday high of $53.45. Gains were in contrast to a 4% drop that took the U.S. benchmark down to $51.14 Wednesday, the lowest front-month contract finish since Jan. 14, according to Dow Jones Market Data.
August Brent crude BRNQ19, +3.17% climbed $1.86, or 3.1%, to $61.83, following a session high so far of $62.64 a barrel, reached earlier when reports of the tanker attacks surfaced. The prior session saw Brent tumble 3.7% to $59.97 a barrel, the lowest front-month finish since Jan. 28.
Areas under the control of the Syrian army are facing a serious fuel crisis arising from the sanctions imposed on the Syrian government by the US. Washington prevents any attempts to deliver oil in the SAA-held territories. Even the US-led coalition hit oil tankers heading from areas controlled by the SDF.
— SMM Syria (@smmsyria) May 31, 2019
It must be noted that tensions between the US and Iran continue to escalate. After two oil tankers were attacked in the Gulf of Oman, American officials were quick to blame Iran for the incident. It is noteworthy that Japanese prime minister Shinzo Abe arrived in Tehran for talks amid US-Iran tensions.
It remains unclear who would benefit from striking the ships, especially as the attack took place during a rare visit to Tehran by Japanese Prime Minister Abe, and doubly so given the ships were carrying Japan-related petrochemical cargo. But it suits a few countries, including the US and Saudi Arabia, who maintains the pressure on Iran and escalating the situation in Syria.
A policy that maintains economic sanctions causes mass suffering. The crisis in Syria hurts only civilians. Drivers to queue for hours, only to find petrol stations have run out of fuel by the time they reach the front of the queue. Also the crisis allow to illegally gain profit on this.
📷1/2 #Exclusive photos demonstrate fuel crisis in #SDF-held #Manbij city of #Aleppo province. Local residents claim #Kurdish authorities deliberately limit fuel supplies to the city to increase prices pic.twitter.com/tKaVAe3BXV
— SMM Syria (@smmsyria) June 5, 2019