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Initial US assessment blames Iran for ship attacks off UAE coast

14 May 2019

UAE officials said four commercial vessels had been damaged, and Saudi officials said two of its ships - on their way to be filled with crude oil - were sabotaged.

"The team of USA military experts was sent to investigate the damages at the request of the UAE, but American officials have not provided any details about what exactly happened or any proof as yet about the possible Iranian involvement in the explosions", The AP added. In response, President Trump said of Iran, "We'll see what would be a very bad mistake if they do anything". With little information about the oil tanker attacks, the incident stoked fears of a worst-case scenario: a confrontation between the USA and Iran.

Britain warned of the danger of conflict erupting "by accident" in the Gulf.

The US Energy Department later said it was "monitoring the oil markets, and is confident they remain well-supplied". Even still, fears of an escalation were already stoking oil prices on Monday morning.

Indeed, since the beginning of last month, tensions between Washington and Tehran have ratcheted up significantly.

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But the letter did not detail Iran's economic demands, specifically, how much oil it wants to sell, one diplomat said.

As the White House intensifies its "maximum pressure" campaign against Tehran, Iranian officials are weighing their options too with the question of whether Iran would ever close the Strait of Hormuz.

The world of oil shipping is full of "chokepoints", from the Panama Canal to the Strait of Malacca near Singapore, but the Strait of Hormuz is arguably the most significant.

The UAE said the attacks occurred in the Gulf of Oman, east of Fujairah. Despite its narrowness, the route is deep enough for the world's largest oil tankers.

The trade turmoil has prompted hedge funds to cut their bullish wagers on US crude oil to the lowest level in a month and raised their bets on Brent crude to the highest in almost seven months, USA government data showed on Friday.

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U.S. West Texas Intermediate (WTI) futures were at $62.49 per barrel, up 83 cents. Multiple that by six, put it on oil tankers, and have the ships sail through a waterway equal to the distance between New York City's Washington Square Park and the top of Central Park. And, that's just oil-never mind gas, food, and other necessities that follow the same path.

The Saudi vessels were identified as the VLCC tanker Amjad and crude tanker Al Marzoqah, both owned by Bahri.

Earlier this month, the Maritime Administration warned that USA commercial ships including oil tankers sailing through key Middle East waterways could be targeted by Iran in one of the threats to United States interests posed by Teheran.

- With global oil consumption standing at about 100 million bpd, that means nearly a fifth passes through the Strait.

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Initial US assessment blames Iran for ship attacks off UAE coast