An Iranian-owned oil tanker was hit by two missiles in the Red Sea off the Saudi port city of Jeddah on Friday, Iran's state television reported, quoting the National Iranian Oil Company (NIOC) which owns the vessel.
The tanker, which was set ablaze, suffered heavy damage and crude had leaked after it was struck in the early morning about 60 miles (96 km) from Jeddah, Iranian media reported. State-run IRNA agency said the oil leak was now under control.
The alleged attack is the latest incident involving oil tankers in the Red Sea and Gulf region, and is likely to ratchet up tensions between regional foes Iran and Saudi Arabia.
The Red Sea is a major global shipping route for oil and other trade, linking the Indian Ocean with the Mediterranean via the Suez Canal. Crude prices jumped on the news and industry sources said it could drive up already high shipping costs.
There was no immediate claim of responsibility. Saudi Arabia had no immediate comment.
The US Navy's Fifth Fleet, which operates in the region, said it was aware of media reports about the tanker, but did not have any further information.
Tensions with the United States have been running high since Washington withdrew from a deal between world powers and Iran that aimed to rein in Tehran's nuclear ambitions. US sanctions have slashed Iranian oil exports, on which Tehran relies.
Responding to Friday's incident, China's Foreign Ministry spokesman said Beijing hoped all parties would work to uphold peace and stability in the region. China is the top buyer of Iranian oil.
Iran's ISNA news agency cited a source saying the Iranian tanker was struck in a "terrorist" attack. Iran's state television reported that two of the ship's tanks were damaged.
The incident follows strikes on key Saudi oil installations in September and attacks on tankers in the Gulf area in May and June. The United States has blamed Iran, which denied any role.
Oil prices climbed 2% after reports of the tanker explosion, with benchmark Brent LCOc1 and U.S. West Texas Intermediate crude futures CLc1 both rising more than $1 a barrel. [O/R]
NIOC identified the ship as Sabiti, a Suezmax vessel, after initial reports had said it was the Sinopa, another Suezmax ship. Refinitiv ship tracking data gave the Sabiti's last reported position on Aug. 14 as off Iran's southern coast in the Gulf.
Iran's Nour news agency, which is close to the Iranian Revolutionary Guard Corps, said the ship's crew was safe.
The Sept. 14 attacks on Saudi oil sites in the east of the kingdom shut down 5.7 million barrels per day (bpd) of production, about half of Saudi output and roughly 5% of global supply. Output has since been restored.
Yemen's Iran-aligned Houthi group claimed responsibility for those attacks, but a U.S. official said they originated from southwestern Iran. Riyadh blamed Tehran. Iran denied any role.
Industry sources said Friday's incident off the Saudi coast could drive up shipping costs, which have already surged.
"War risk insurance premiums for the Red Sea will now likely go up significantly, as will likely the freight (rates)," said Ashok Sharma, managing director of shipbroker BRS Baxi in Singapore.
Tanker rates have soared to multi-year highs in recent weeks after US sanctions on units of Chinese shipping giant COSCO and after the attacks on Saudi oil sites.
Disruption to shipping through Red Sea would affect oil passing through the Suez Canal or SUMED crude pipeline, which has capacity for 2.34 million bpd and which runs parallel to the canal. It is used by tankers that cannot navigate the waterway.
Additional reporting by Catherine Cadell in Beijing, Sylvia Westall in Dubai and Roslan Khasawneh in Singapore; Writing by Parisa Hafezi and Edmund Blair; Editing by Mike Collett-White and Alex Richardson.