Three tankers were stopped by Iranian sea mines on Tuesday while using Strait of Hormuz lanes that Tehran has not approved, according to Iran's Revolutionary Guards. The US military has dismissed the account as false.
Iranian state media carried the Guards' statements. In the first, two ships were said to have burst into flames after mines exploded at a crossing on the strait's southern side that the Guards consider illegal. A second statement, aired on state TV, added a third vessel, which the Guards described as a supertanker loaded with more than two million barrels. They said its crew had turned off the ship's radar and navigation gear before it struck a mine. Ship operators and their crews would be held accountable if they used routes Iran has not approved, the Guards added.
None of the ships was identified by name, flag or owner. No shipowner or flag state has reported a strike. A US Central Command (CENTCOM) spokesman rejected Iran's version of events and said American forces had already swept the strait's international lanes clear of mines.
Tuesday's statements were the latest in a run of similar claims. The Guards said a supertanker hit a mine on Saturday and that another tanker caught fire in its engine room on Monday. At least one has not held up. Iran said a mine sank the Singapore-flagged container ship GFS Pride last week, but Singapore's maritime authority said a projectile strike caused the damage and fire, and US officials blamed an Iranian projectile.
Brent holds near $109
Brent crude traded at $109.24 a barrel at 12:08 GMT on Wednesday, up 45 cents from Tuesday's settlement of $108.79. WTI was up 67 cents at $98.49. Both had gained about 1.5% during Asian trading, with Brent briefly above $110, before giving back part of the move.
Tuesday was a bumpy session. Brent reached a five-month high above $111 early on. It then slid as low as $105.95 after The New Arab said Qatar and Pakistan had drafted a "middle ground" plan to get Washington and Tehran talking again. The plan reportedly puts about $6 billion of frozen Iranian money in Qatari banks on the table, which would go part of the way toward Tehran's demand that its assets be released. In return, Iran would let UN nuclear inspectors make secret visits.
The selling did not last. According to Bloomberg, a diplomat with a role in the negotiations pushed back on talk of an imminent agreement. Iran's parliament speaker, Mohammad Bagher Ghalibaf, told Pakistan's army chief, Asim Munir, that Washington would have to meet Iran's earlier demands, such as halting all hostilities and unfreezing its assets, before Tehran could trust it. Brent bounced back to settle 76 cents lower on the day.
Suvro Sarkar, who heads energy research at DBS, told Reuters the slide reflected profit taking mixed with hopes for a deal brokered by Qatar or Pakistan. Those hopes faded, he said, once traders accepted that any agreement is "still very distant."
Attacks on shipping keep piling up
The mine claims come on top of a steady stream of strikes on ships. Kpler, which tracks vessel movements, has logged 18 or more attacks in the last 14 days. UKMTO, a Royal Navy unit that monitors merchant shipping in the region, recorded at least a dozen in the seven days to Oct. 16. LSEG analysts say Iranian forces are now hitting ships well outside the strait, with some attacks reported in the Gulf of Oman.
All of that shows up in shipping bills. Goldman Sachs estimates that the average cost of moving a barrel of crude by sea is now above $20, against about $3 a year ago. Those record freight costs have already pushed Washington to consider letting blacklisted tankers carry legal oil.
Yemen is adding to the pressure. On Monday, the Houthis said they had struck an Aramco site at Yanbu and the Shaybah field, along with the airports serving Riyadh and Abha. The Red Sea port of Yanbu has become Saudi Arabia's main route for exporting crude while avoiding Hormuz. No one outside the group has confirmed the attacks.
US crude stocks fall again
Supply is getting tighter at home as well. The American Petroleum Institute's weekly estimate showed US crude stocks dropping by roughly 4.9 million barrels during the week that ended Oct. 16, far more than the 1.3 million-barrel decline analysts had forecast. Official figures from the Energy Information Administration are due at 10:30 a.m. ET on Wednesday.
What to watch
- Evidence from the water. A ship name, an owner statement or a UKMTO report would show whether Iran's mine claims hold up.
- Qatar and Pakistan. Tuesday showed how fast prices can drop on any sign that mediation is moving. An official confirmation of the reported plan would test that again.
- EIA data. Another big draw would point to a tighter US market heading into winter.
- The Nov. 3 midterms. Iranian officials told Reuters last week that they want crude to stay expensive in the run-up to the US vote.