Al Marzoqah tanker is seen off the Port of Fujairah, United Arab Emirates. Image Credit: Reuters

Abu Dhabi: Oil prices spiked by 2 per cent on Monday on supply concerns, following attacks on two oil tankers from Saudi Arabia near the Strait of Hormuz.

Brent, the global benchmark was up 1.76 per cent at $71.86 per barrel on Monday at 2.26pm.

West Texas Intermediate was up 1.48 per cent at $62.57 per barrel.

One of the two vessels was on its way to be loaded with Saudi crude oil from the port of Ras Tanura, to be delivered to Saudi Aramco’s customers in the United States.

The Strait of Hormuz is one of the busiest shipping routes in the world, through which 40 per cent of traded global oil passes daily.

Though the incident didn’t lead to any causalities or oil spill, it has sparked fears of a potential supply disruption in what is the global epicentre of the world’s oil supply.

“This strategic waterway is without a doubt the most important oil artery with around 19 million barrels or a third of all seaborne oil passing through it. Any further disruptions to shipping flows in this most vital of choke points risk stoking fears of a supply crunch and subsequent spike in oil prices,” Stephen Brennock, an oil analyst from London based PVM oil associates told Gulf News.

Attention will now turn to avoiding repeat incidences and safeguarding passage for all freight in the Strait of Hormuz, he added.

The latest tensions in the Middle East come as the United States administration terminates Iran sanction waivers granted to eight countries that import oil from the Islamic Republic.

Bjornar Tonhaugen, head of oil market research at Rystad Energy in Oslo, also told Gulf News oil prices would react violently upwards if the strait was to be blocked or disrupted, even only for a short period of time.

“There is limited bypassing options to export crude although Saudi Arabia and the UAE have limited pipeline capacity to pass some crude exports to the Red Sea or the Gulf of Oman. All oil exports from Iran, Kuwait, Qatar, Bahrain, and around 90 per cent of Saudi Arabia’s oil and 75 per cent of Iraqi crude exports pass through the Strait of Hormuz.”

The UAE built a 370-kilometre pipeline connecting Habshan in Abu Dhabi and Fujairah with a capacity to transport 1.5 million barrels per day of crude oil in 2012 to help the country supply oil bypassing the Strait of Hormuz.