Two UAE Cargo Ships Sink in Strait of Hormuz as Tensions Rise, Stoking Oil Price Fears

As U.S. Protection Boosts Crude Shipments

Iran Expands Scope and Targets of Commercial Vessel Attacks

Two cargo ships owned by a United Arab Emirates shipping company have sunk in separate incidents after coming under attack in the Strait of Hormuz, raising concern that escalating tensions in the Middle East could send international oil prices higher again.

The Wall Street Journal reported on October 15 that the GFS Pride and Cape Dao, both owned by a UAE shipping company, had sunk. Cargo ships and tankers have frequently come under Iranian attack in the strait, but these were only the second and third sinkings. The previous case came in March, when one vessel went down as the war intensified.

The latest sinkings come as Iran sharply steps up efforts to disrupt crude shipments from the Gulf region. Iran's Islamic Revolutionary Guard Corps released what it said was footage of the GFS Pride sinking and claimed the vessel had passed through a dangerous route. The Cape Dao sank about three weeks after its port side was hit by two projectiles about 27.8 kilometers northeast of Khasab, Oman, on September 23.

Iran, whose crude export routes have been blocked by a U.S. naval blockade, has recently increased attacks on commercial vessels around the Strait of Hormuz.

There were 12 attacks on commercial ships around the Strait of Hormuz last week, according to maritime intelligence firm Windward AI. That was the highest weekly total since the outbreak of the Iran war. The number of vessels attacked this month has risen to 24, setting another weekly record.

Most of the recently targeted vessels were passing through the southern route of the Strait of Hormuz near Oman under U.S. protection. Michel Wizje Bokmann, a maritime intelligence analyst at Windward AI, said the locations of the sunken vessels suggest Iran has broadened both the range and targets of its attacks. The increase has come alongside a rise in crude shipments through the strait and a weakening of Iran's control, he added.

Brent crude futures for December delivery on ICE Futures Europe in London rose 0.35% from the previous session to $106.06 a barrel on October 14. Prices retreated back to the $104-a-barrel range on October 15.

Kim Ju-wan, Hankyung.com reporter kjwan@hankyung.com