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Saudi Arabia says its oil tankers among those hit off UAE coast

Saudi Arabia says its oil tankers among those hit off UAE coast
A damaged ANDREA VICTORY ship is seen off the Port of Fujairah, United Arab Emirates, May 13, 2019. REUTERS/Satish Kumar -
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SATISH KUMAR(Reuters)
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By Rania El Gamal and Bozorgmehr Sharafedin

DUBAI/LONDON (Reuters) - Saudi Arabia said on Monday that two of its oil tankers were among those attacked off the coast of the United Arab Emirates and described it as an attempt to undermine the security of crude supplies amid tensions between the United States and Iran.

The UAE said on Sunday that four commercial vessels were sabotaged near Fujairah emirate, one of the world's largest bunkering hubs lying just outside the Strait of Hormuz. It did not describe the nature of the attack or say who was behind it.

The UAE on Monday identified the vessels as very large crude carrier (VLCC) tanker Amjad and crude tanker Al Marzoqah, both owned by Saudi shipping firm Bahri. The other two were UAE-flagged fuel bunker barge A. Michel and Norwegian-registered oil products tanker MT Andrew Victory.

Thome Ship Management said its MT Andrew Victory was "struck by an unknown object". Footage seen by Reuters showed a hole in the hull at the waterline with the metal torn open inwards.

A Reuters witness said divers were inspecting damaged ships. The UAE's state news agency said Fujairah port was operating normally.

Iran, which is embroiled in an escalating war of words with the United States over sanctions and the U.S. military's presence in the region, moved to distance itself on Monday.

Iran's Foreign Ministry called the incidents "worrisome and dreadful" and asked for an investigation into the matter.

A senior Iranian lawmaker said "saboteurs from a third country" could be behind it, after saying on Sunday the incident showed the security of Gulf states was fragile.

The United States has limited information as yet about who may have been responsible for the attacks, said a U.S. official familiar with American intelligence on the incident and who spoke on condition of anonymity.

Britain's Foreign Minister Jeremy Hunt warned of the risks of "a conflict happening by accident" with an unintended escalation between Washington and Tehran over an unravelling nuclear deal.

CHOKEPOINT

Washington withdrew last year from a 2015 pact between Iran and global powers aimed at reining in Tehran's nuclear plans. Since then, the United States has ratcheted up sanctions on Iran, saying it wanted to reduce its oil exports to zero.

A fifth of global oil consumption passes through the Strait of Hormuz from Middle East crude producers to major markets in Asia, Europe, North America and beyond. The narrow waterway separates Iran from the Arabian Peninsula.

Iran's Revolutionary Guards, designated a terrorist organisation by the United States, threatened last month to close the chokepoint if Tehran was barred from using it.

Oil prices rose more than $1 a barrel earlier on Monday but then fell with Wall Street as the negative turn in U.S.-Chinese trade talks spooked investors. Brent futures were trading at $69.85 a barrel by 1704 GMT, down 77 cents.

Saudi Energy Minister Khalid al-Falih said one of the two Saudi vessels was attacked in the UAE economic zone on its way to be loaded with Saudi crude from Ras Tanura port for delivery to state-owned Aramco's customers in the United States.

The attack did not cause an oil spill but there was significant damage to the vessels' structures, he said.

The UAE foreign ministry said there were no casualties. It said an investigation was launched in coordination with international authorities and called on global powers to prevent any parties trying to harm maritime safety.

A U.S. defence official, speaking on condition of anonymity, said the U.S. military was assisting in the investigation.

Dubai and Abu Dhabi stock markets suffered their biggest single-day declines in years on Monday, with Dubai falling 4%. Saudi shares lost 3.6%.

OIL SECURITY

Sunni Muslim allies Saudi Arabia and the UAE have backed U.S. sanctions against Shi'ite Iran, a fellow OPEC producer but regional foe. After the United States ended sanctions waivers that had allowed some nations to continue importing Iranian crude, Washington said Riyadh and Abu Dhabi would help compensate for any shortage in oil supply.

Falih said the attack aimed to undermine maritime freedom and the security of oil supplies to consumers worldwide.

"The international community has a joint responsibility to protect the safety of maritime navigation and the security of oil tankers, to mitigate against the adverse consequences of such incidents on energy markets and the danger they pose to the global economy," he said.

Iranian Foreign Ministry spokesman Abbas Mousavi said the incident "has a negative impact on maritime transportation security" and asked regional countries to be "vigilant against destabilising plots of foreign agents", the semi-official ISNA news agency reported.

The U.S. Maritime Administration said in an advisory on Sunday that incidents off Fujairah, one of the seven emirates that make up the UAE, had not been confirmed and urged caution.

The Maritime Administration had said earlier this month that U.S. commercial ships including oil tankers sailing through Middle East waterways could be targeted by Iran in one of the threats to U.S. interests posed by Tehran.

Washington said it was sending a U.S. aircraft carrier and other forces to the Middle East due to what it said were Iranian threats, while Tehran has called the U.S. military presence "a target" rather than a threat. Iran has said it would not allow its oil exports to be halted.

(Graphic on oil tankers attacked: https://tmsnrt.rs/2W4yczs)

(Additional reporting by Jonathan Saul and Robin Emmott in London, Idrees Ali and Mark Hosenball in Washington, Saeed Azhar in Dubai and Oslo newsroom Writing by Ghaida Ghantous Editing by Edmund Blair and Mark Potter)

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