The recent seizure of a tanker is raising tensions for shipping on the Vital Oil route Ship’s crew

By Verity Ratcliffe

(Bloomberg) – Iran seized a second oil tanker in less than a week, escalating tensions for shipping in one of the world’s most important trade corridors.

Iran’s Islamic Revolutionary Guard Corps Navy intercepted the Panama-flagged oil tanker No around 6:20 a.m. local time on Wednesday as it passed through the Strait of Hormuz, according to a US Navy statement.

The incident is the latest flare-up in one of the world’s oil-rich regions. Hundreds of tankers transit the strait every month on their way to and from ports in Saudi Arabia, the United Arab Emirates, Iraq and Kuwait. Last week, Iran seized a tanker in the nearby Gulf of Oman.

The White House called for the immediate release of the No and its crew, with a spokesman for the National Security Council describing the confiscation as contrary to international law and as an irresponsible threat to maritime security.

Futures on benchmark global Brent crude initially stabilized after the report, breaking a slide under $75 a barrel for the first time since March. Futures later continued their decline, trading below $73 at 1:30 p.m. New York time.

The No left Dubai and was en route to the port of Fujairah in the United Arab Emirates when “a dozen IRGCN fast attack boats ambushed the ship in the middle of the strait,” according to the US. The ship was forced to head towards Iranian territorial waters off the coast of Bandar Abbas, it said.

The US noticed the incident while routinely patrolling the area with a drone, a Navy spokesman said.

Iran’s news service Tasnim reported that Iranian naval forces took a foreign oil tanker in the Strait of Hormuz, without giving further details. The tanker was seized “by order of the judicial authorities after a complaint,” the official Mizan news agency told the Iranian judiciary, without specifying the case.

The No, built in 2005, is a supertanker capable of transporting 2 million barrels of crude oil, ship tracking data compiled by Bloomberg shows. According to a signal from his navigation system early Wednesday, his draft indicated it was not loaded.

The ship’s owner, Greece-based Smart Tankers Inc., was not immediately available for comment.

The seizure follows a statement last month from the Union of Greek Shipowners, which told members that ships in the Persian Gulf region are “exercising increased caution and avoiding navigation in waters under Iran’s jurisdiction.”

The Iranian Navy seized the Marshall Islands flag Advantage Sweet according to the US on April 27 in international waters in the Gulf of Oman. Chevron Corp. chartered tankers were carrying crude oil at the time, data compiled by Bloomberg shows.

Iran said the ship collided with an Iranian ship in the Persian Gulf, prompting its navy to seize it. The tanker sailed to Bandar Abbas, where it is being held with its crew. The US has demanded the release of the ship.

Some US officials believe the move was in retaliation for a Justice Department decision to force a tanker – bound for China with Iranian oil – to be diverted to America, the Financial Times reported.

–Assisted by Alex Longley, Paul Tugwell, Sotiris Nikas, Arsalan Shahla, Prejula Prem and Justin Sink.

© 2023 Bloomberg LP

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