Iranian tanker incident unnerves Asia petchem traders

Iran's state-owned shipping company NITC has reported an incident involving one of its crude tankers in the Red Sea, further unnerving Asian petrochemical traders and distributors.

Details of the incident are unclear. NITC said in an initial statement that the Suezmax Sabiti was around 60 miles (97km) off the port of Jeddah in Saudi Arabia when two separate explosions occurred at 05:00 and 05:20 local time today, causing "limited" damage to the vessel's hull.

A source familiar with the matter has since told Argus that the fully-laden tanker was hit by a foreign object and has a minor leak, but did not experience any explosion or fire. No casualties have been reported as a result of the incident and NITC is yet to decide on a course of action.

The Red Sea region, where the incident took place, is home to number of petrochemical producers.

PetroRabigh, a joint venture between state-owned Saudi Aramco and Japan's Sumitomo, is based in Rabigh, while Yansab and Natpet are located at the petrochemical hub of Yanbu. Both are on Saudi Arabia's Red Sea coast.

The incident comes less than a month after attacks on oil installations in Saudi Arabia, which cut feedstock allocations to petrochemical producers and sent prices higher.

Crude oil prices rose by around 2pc on news of today's incident before receding, but petrochemical prices did not immediately react. The incident happened towards the end of the petrochemical trading week in Asia, and during the weekend in the Middle East.

Shipowners operating in the Middle East have already expressed serious concerns over the security of their vessels and highlighted the need to raise premiums, following earlier incidents in the region.

Two tankers were attacked in June in the Gulf of Oman, near the strategic strait of Hormuz. Those attacks hit the Front Altair, which was carrying a naphtha cargo from the UAE to Taiwan, and the chemical tanker Kokuka Courageous that was loaded with methanol.