Global Oil Supply Concerns Grow After Ship Hit in Strait of Hormuz

Concerns over global fuel supplies have intensified after a ship was reportedly struck by a projectile in the Strait of Hormuz. Meanwhile, Saudi Arabia has temporarily shut down the key East-West oil pipeline as a security precaution.

The UK Maritime Trade Operations (UKMTO), an organisation linked to the British Navy, said it received reports that a ship was hit by a projectile while transiting the Strait of Hormuz on Sunday (September 13). The extent of the damage to the vessel and the condition of its crew were not immediately known.

A day earlier, Saudi Arabia said it had temporarily shut down the East-West pipeline as a precaution following a drone attack launched from Iraq. Saudi authorities said the pipeline was damaged in the attack and several people were injured. No group has yet claimed responsibility for the attack.

The nearly 1,200-kilometre pipeline is important for Saudi oil exports as an alternative route to the Strait of Hormuz. In recent months, around 4 to 5 million barrels of oil were transported through the pipeline every day, equivalent to roughly 4 to 5 percent of global supply.

Meanwhile, US President Donald Trump said Iran was possibly responsible for the attack. However, he provided no evidence to support the claim. As a result, those behind the attack have yet to be confirmed.

Earlier on Saturday, Saudi Civil Defence said a projectile fired by Yemen’s Houthi rebels struck the Jazan region. Two people were injured and several buildings, including a mosque, were damaged in the incident.

Concerns in international energy markets are growing as a series of security incidents disrupt shipping through the Strait of Hormuz and Saudi Arabia’s alternative oil transportation routes. Brent crude prices had already risen above $100 a barrel last week.

Sources: Reuters, AP