Global oil prices rebounded from five-month lows Thursday amid two attacks on shipping tankers near the Gulf of Oman in what could be a renewed attempt to disrupt crude exports in one of the world's busiest sea transport lanes.
While neither of the tankers were reported to be carrying oil at the time of the attacks, which were serious enough to evacuate both ships and call in support from the U.S. Navy's nearby Fifth Fleet, the incidents nonetheless escalated tensions in the region and echoed similar disruptions on Saudi oil tankers in mid-March. Around a fifth of the world's oil passes through the Strait, which separates the Persian Gulf states from Iran and the epicenter of military tensions between Washington and Tehran, each year.
"The ship is safely afloat. The hull has been breached above the water line on the starboard side," Bernhard Schulte Shipmanagement, which owns the 'Kokuka Courageous' oil tanker, said in a statement on its website. "There has been a fire in the engine room and the carbon dioxide fire system has been released."
Brent crude contracts for August delivery, the global benchmark, were seen $1.82 higher from their Wednesday close in New York and changing hands at $61.78 per barrel, after earlier surging as much as $2.25.
WTI contracts for July, which are more tightly linked to U.S. gas prices, were marked $1.47 higher at $52.61 per barrel, rebounding from yesterday's five-months lows.
Earlier this spring, Saudi Arabia reported an attack on two of its production facilities in the Gulf by an "armed drone" in what the Kingdom insists is an "an act of terrorism" on global crude supplies.
Thursday gain may not extended through the week, however, and oil prices are heading towards a seven-day decline, and have slumped more than 20% since a late April peak, amid concerns of waning global demand and swelling U.S. inventories.
Oil slumped yesterday after the EIA said U.S. supplies rose by 2.21 million barrels in the week ending June 7, against forecasts of a 480,000 barrel gain, to take the overall supply tally to 485.47 million barrels, the highest in nearly two years.
U.S. oil prices have fallen more than 22% since late April, reversing a run that began on Christmas Eve and took prices to multi-year highs, as investors began to question the strength of global crude demand as the world's biggest economies saw slowing growth amid the ongoing U.S.-China trade dispute.
The EIA trimmed its forecast for world demand yesterday to around 1.22 million barrels per day, in fact, in its regular Short-Term Energy Outlook report, a 160,000 reduction from its prior forecast. It also lowered its growth estimate for 2020 by 110,000 to 1.42 million barrels per day. OPEC's monthly report, which was published Thursday, noting "significant downside risks from escalating trade disputes spilling over to global demand growth remain."