Oil climbs to a six-month high as the Gulf war widens
Iran claimed its biggest day of attacks on tankers, Houthi attacks left four people dead in Saudi Arabia, and Donald Trump talked of 'another little Epic Fury'.
The price of oil rose for a third week running. On Friday 23rd October Brent crude, the global benchmark, briefly passed $117 a barrel1 and settled at $116.72, its highest since April.2 Before the war between the United States and Iran began on 28th February it was about $72.1
Traders were reacting to three things at once: Iran's claims of new attacks on tankers, the spread of the war to Saudi Arabia, and the prospect of American strikes on Iran resuming.
Seven tankers, by Iran's count
The Strait of Hormuz, the narrow passage out of the Gulf, carried about a fifth of the world's oil before the war, according to the US Energy Information Administration.3 Since February Iran has demanded that ships seek its permission and use a route close to its coast, while the US Navy escorts ships along a southern route near Oman.
On Thursday 22nd October Iran's Islamic Revolutionary Guard Corps said its forces had hit four oil tankers at once in the northern Gulf, and that three more had struck mines in the strait the night before. It was the largest number Iran had claimed in a single day of the war. The claims have not been verified. US Central Command, which runs American forces in the region, said the mine claims were incorrect and that 95% of ships were getting through.4 Trump wrote that Iran was "making up fake hits, mines, and everything else" to raise oil prices before the US midterm elections on 3rd November.5
The United Kingdom Maritime Trade Operations centre, which collects reports from ships, confirmed one attack that day: a tanker was hit by an unknown projectile about seven nautical miles north-east of Limah, in Oman, and continued its voyage.6 Its counts are a minimum, because many ships no longer report to it. It has recorded 135 incidents since the war began.7
Oil from an earlier attack reached the shore this week. The United Arab Emirates closed the beaches of Umm Al Quwain after a spill washed up, and BBC Verify traced the slick to the Gem No.2, a tanker struck on 9th October.8
The war reaches Saudi airports
The Houthi movement in Yemen, which is aligned with Iran, extended its attacks on Saudi Arabia. On 21st October a strike on King Fahd International Airport in Dammam killed two people and injured eight, according to The Jerusalem Post, and Saudi Arabia's energy ministry said debris from a drone shot down over Saudi Aramco's Shaybah oilfield killed two residents, from the Philippines and Nepal. The United States ordered its non-emergency staff and their families to leave Saudi Arabia.9 By Friday it was also reducing staff at its embassies in Jordan, Lebanon, Qatar and the UAE, after the US director of national intelligence warned that Iranian plots against Americans abroad had "reached advanced stages".5
Britain stepped up its support for Saudi Arabia. On Tuesday 20th October, the day before the Dammam strike, the Defence Secretary, Wes Streeting, approved further military help: "RAF Typhoons will fly defensive air missions to help protect Saudi airspace from drones and missiles." Britain is also extending the air-to-air refuelling it provides for Saudi air operations. The Ministry of Defence said the jets would have a defensive role and would not attack the Houthis.10
"Another little Epic Fury"
Speaking at a campaign rally in Fort Myers, Florida, on Friday,11 Trump said: "We may do another little Epic Fury, or they'll agree."12 Operation Epic Fury was the name of the American strikes that started the war.
Iran's answer came on Saturday from the chief of staff of its armed forces, Ali Abdollahi, on state television: "We will not allow US military ships in the Persian Gulf under any circumstances … He will take that dream to his grave."12
Later on Saturday, after voting early in Florida, Trump was asked whether he would strike again. "Maybe tomorrow... There's a possibility I will. There's also a possibility we'll have a nice, big, beautiful agreement," he said.13 Iran's president, Masoud Pezeshkian, blamed Washington for the collapse of the earlier deal but said both sides should return to it and "conclude it".14 No new American strike had been reported by Sunday morning.
The Houthis kept up their attacks over the weekend. Saudi Arabia's civil defence said two ballistic missiles were fired towards Mecca and Medina on Saturday and warned of falling debris after they were intercepted; the Houthis called that claim a "huge lie" and said they had aimed at three Saudi airports, oil infrastructure and an airbase. Yemen's government said two missiles were fired at Aden's airport, the fourth such attack this month. Early on Sunday the Saudi-led coalition said it had shot down a missile aimed at Riyadh, whose airport had just announced it would reopen after a two-week closure.15
In Istanbul, foreign ministers from Britain, France, Germany, Italy, Turkey, Saudi Arabia, Pakistan and Egypt urged both sides to return to diplomacy. "We cannot afford another escalation," they said.16
Where it stands
A deal signed in June to reopen the strait collapsed over the summer, and no new round of talks has been announced, although Iran's foreign minister, Abbas Araghchi, said on 18th October that Tehran's proposal to reopen the strait within seven days was still on the table.13 Asked by the Financial Times whether the war could last another year, Mike Waltz, the US ambassador to the United Nations, said: "I'm not going to put out hypotheticals," according to CBS News.5 The open question is whether the United States strikes again, before its elections or after them, and whether Iran answers at sea.