A drone strike on gas vessels at Egypt's Damietta port has opened a potential new front in the five-month U.S.-Iran war, threatening one of the last remaining routes for Saudi oil exports. Brent crude traded just below $90 a barrel on Thursday after prices spiked more than 8% a day earlier, while Saudi Arabia joined U.S. strikes in Iraq for the first time and Iran pressed its grip on the Strait of Hormuz.
An unidentified drone caused a fire on two vessels at Damietta port on Wednesday, Egypt's cabinet said Thursday, raising the prospect of threats to the Suez Canal — one of the last remaining export routes for Saudi oil. No group has claimed responsibility. Trading sources familiar with the incident said the drone hit the U.S.-owned gas storage tanker Energos Winter, with the fire spreading to a second vessel.
Overnight, the U.S. military also said it struck Iran's Revolutionary Guard Corps command centres and drone facilities, after Tehran fired at U.S. forces in the region.
Oil jumps as strikes widen the war
Oil prices soared more than 8% on Wednesday before easing about 1% on Thursday, with Brent crude trading just below the $90 mark.
Saudi Arabia publicly joined U.S. strikes for the first time in the five-month war on Wednesday, targeting Iran-aligned groups in eastern Iraq in retaliation for drone attacks on Saudi oil targets launched from Iraq. Yemen's Iran-allied Houthis carried out those attacks on Saudi Arabia from Iraq this week in coordination with Iraqi groups, according to assessments by Saudi Arabia and regional partners.
Strait of Hormuz stays contested
Iran said on Wednesday it struck three tankers attempting to transit the Strait of Hormuz along an unauthorised route, a waterway Tehran now says it controls. However, a QatarEnergy-controlled LNG tanker exited the strait overnight — the first such vessel recorded leaving the waterway since July 11, after Iran's Fars news agency said Tehran had given its permission.
Oman has presented Iran with a plan backed by Gulf states to manage the strait, including collecting voluntary fees for its use. Tehran rejected the Omani proposal on Wednesday, though Iran's foreign ministry spokesperson said talks with Oman were continuing.
The Houthis in Yemen declared a naval blockade on Saudi Arabia last week, threatening the alternative Red Sea route for its oil to Asia. London's marine insurance market has since widened its "high risk" zone in the Red Sea to include more of the coast near Saudi ports.
Source: Investing.com
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