Global oil prices rose sharply Friday after Iran said one of its commercial oil tankers was hit by two missiles near the Saudi Arabian port of Jeddah, reigniting military tensions in the Gulf region following attacks on Saudi ships and oil facilities last month.
Iranian state television the National Oil Company tanker was heading towards the Red Sea when it was struck by missiles that caused an explosion in two of its tanks, triggering a spill that was quickly seal by the crew on board. Iran's Press TV, a state-backed media group, aired comments from a National Iranian Tanker Company executive who claimed the missiles appeared to originate from the Kingdom.
The Pentagon said Friday that a "large deployment" of U.S. troops would be sent to Saudi Arabia, including air defenses and fighter squadrons, in the wake of the alleged incidents.
Oil markets were also riding gains from both the hopes of a near-term U.S.-China trade deal and comments OPEC Secretary-General Mohammad Barkindo that the cartel may look to deeper production cuts at its December meeting in order to balance global crude markets, while making no changes to its 2020 demand growth forecasts.
Brent crude contracts for December delivery, the global benchmark, were seen $1.26 higher from Thursday's New York close to trade at $60.36 per barrel while WTI contracts for November delivery, which are more tightly linked with U.S. gasoline prices, were marked $1.00 higher at $54.55 per barrel.
Last month, oil prices saw the biggest single-day surge in more than two decades after a drone attack on two Saudi Arabian crude facilities that shutdown at least 5% of world production and spark renewed concerns of military conflict in the Gulf region.
Saudi Arabia blamed Iran, which has also been implicated in drone attacks on various oil tankers in the Strait of Hormuz earlier this year, for orchestrating the attacks, although rebels linked to the Yemeni Houthi have claimed responsibility. Senior U.S. officials, including Secretary of State Mike Pompeo, have also heavily implicated Iran as being behind the attacks.