Saudi’s call for oil supply protection following Gulf of Oman tanker attacks

Saudi Arabia’s Energy Minister Khalid al-Falih has called for a ‘swift and decisive response to the threat of energy supply’ in the wake of attacks on two oil tankers travelling along a vital shipping route in the Gulf of Oman last week.

The attacks on Norwegian and Japanese vessels took place on the Strait of Hormuz, a narrow channel of water separating Oman and Iran which passes a fifth of the world’s oil supply.

This is the second time in a month that tankers have come under attack in one of the world’s most important oil transportation zones, after four ships were targeted in May, along with mainland Saudi oil infrastructure.

In the wake of the latest attacks, Saudi Crown Prince Mohammed bin Salman joined the US in pointing the finger of responsibility towards Iran, in a further escalation of hostility between the nations.

“We do not want a war in the region…But we won’t hesitate to deal with any threat to our people, our sovereignty, our territorial integrity and our vital interests,” said the Crown Prince in an interview with a Saudi-owned newspaper.

Oil prices soared by over 4% in the immediate aftermath of the attacks, while ship insurance for vessels in the Middle East have jumped by at least 10%.

“Growing tensions in the Middle East remain a cause for concern as traders fear supply disruptions over an escalation towards militaristic conflicts,” said Benjamin Lu, an analyst at Phillip Futures in Singapore.