Oil Prices Moving Following Reports Of Tanker Attacks Near Iran

Brent crude oil prices rose more than 4% Thursday morning amid reports of two tanker attacks near Iran's coastline.

What Happened

Two tankers in the Gulf of Oman suffered significant fire damage, one of which docked in Saudi Arabia and was destined to Singapore, according to CNBC. The other tanker, owned by Frontline Ltd FRO, was carrying a petrochemical feedstock from the Persian Gulf to Japan.

The cause of the fires is not known but geopolitical tensions in the region is creating concern the incident is the result of an attack.

One of the tankers, the Kokuka Courageous, is stranded 14 nautical miles off the cost of Iran although the tanker's owner confirmed there is no risk of sinking.

A division of the U.K. Royal Navy is investigating the incident and urged "extreme caution." U.S. Naval ships in the region are "rending assistance."

In reaction to the incident, independent crude oil tanker oil company DHT Holdings Inc DHT suspended new bookings to the Arab Gulf.

Heidmar also suspended operations in the region.

OPEC Output At 5-Year Low

Separately, oil production from OPEC members dipped to 29.88 million barrels per day, which CNBC said marks the group's lowest output since June 2014.

OPEC said its lower output is the result of global trade tensions and geopolitical risks contributing to a slowdown in global economic activities.

The group is now modeling oil demand to rise by 1.14 million bpd in 2019, but expects non-OPEC producers to raise their combined output by 2.14 million bpd.

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