Brent tops $91 after unidentified projectile hits vessel transiting Hormuz

A cargo vessel was struck by an unknown projectile in the Strait of Hormuz early on Tuesday local time as risks of additional escalation in the region pushed Brent Crude oil prices above $91 per barrel.

The United Kingdom Maritime Trade Operations (UKMTO), a Royal Navy-sponsored organization, said on Tuesday that it had received a report of an incident in the Strait of Hormuz.

“The Company Security Officer has reported that the vessel was struck by an unknown projectile while conducting an outbound transit of the Strait of Hormuz,” the UKMTO said in a warning notice.

“The impact caused damage to the engine room and resulted in a crew casualty. The remaining crew are currently being assisted by the Omani Coast Guard,” said the organization, adding that no environmental impact has been reported at present.

The incident close to the Omani shores in what is believed to be the southern outbound corridor out of the Persian Gulf into the Gulf of Oman took place amid heightened security concerns as the United States and Iran remain distant in their positions about control over the Middle East’s most important shipping lane, especially for oil and LNG.

Declarations by Iran and the U.S. earlier this week make the prospect of peace in the Middle East even more distant, driving crude oil prices higher.

Early on Tuesday in Asian trade, Brent Crude prices had topped $91 per barrel, trading 0.69 per cent higher at $91.50 a barrel. The U.S. benchmark, WTI Crude, topped $85 per barrel, rising by 0.92 per cent on the day to $85.28.

“Prices remained supported by renewed fighting in Lebanon and attacks on vessels in the Strait of Hormuz, raising concerns over regional supply disruptions and complicating prospects for a US-Iran deal,” ING’s commodities strategists Warren Patterson and Ewa Manthey wrote in a note early on Tuesday.

Trump said Monday that he was not seeking an extension of the June framework agreement with Iran, which was intended to pave the way for negotiations to end the war.

The remarks came as the 60-day negotiating period under the framework approached its end without a broader agreement.