By Steven Scheer, Trevor Hunnicutt and Yomna Ehab
JERUSALEM/WASHINGTON, March 31 (Reuters) – Tehran attacked and set ablaze a fully loaded crude oil tanker off Dubai on Tuesday, despite a threat by President Donald Trump that the U.S. will obliterate Iran’s energy plants if it does not agree to a peace deal and open the Strait of Hormuz.
Authorities in Dubai said the fire on the Kuwait-flagged Al-Salmi had been brought under control following a drone attack, with no oil leak and no injuries to the crew. Kuwait Petroleum Corp, the ship’s owner, said the vessel’s hull was damaged.
The attack was the latest on merchant vessels in the strait, a vital waterway, since the United States and Israel attacked Iran on February 28.
LSEG Data showed the vessel was heading to Qingdao in China, and was carrying 1.2 million barrels of Saudi crude oil and 800,000 barrels of Kuwaiti crude, according to monitoring service TankerTrackers.com.
The Al-Salmi may not have been the intended target. Iran’s Revolutionary Guards said they had targeted a container ship in the Gulf over its ties with Israel. But they appeared to be referring to the Singapore-flagged Haiphong Express, which was anchored next to the Al-Salmi, according to shipping data.
HIGHER OIL PRICES
The month-old conflict has spread across the region, killing thousands, disrupting energy supplies and threatening to send the global economy into a tailspin. [MKTS/GLOB]
Crude oil prices briefly spiked again after the attack on the tanker, which can carry around 2 million barrels of oil worth more than $200 million at current prices.
With attacks showing no sign of easing, Pakistan is seeking to mediate in the war. Its foreign minister, Ishaq Dar, was due to discuss the conflict during a visit to China on Tuesday after hosting talks with Turkey, Egypt and Saudi Arabia.
China, one of Iran’s closest allies and the biggest buyer of its oil, issued a new appeal to all sides on Tuesday to halt military operations.
It said three Chinese ships had recently been allowed to sail through the Strait of Hormuz, which normally carries about a fifth of global oil and liquefied natural gas supplies.
Iran says it has received U.S. peace proposals via intermediaries, but its foreign ministry spokesperson said on Monday they were “unrealistic, illogical and excessive”.
After those comments, Trump said the U.S. was in talks with a “more reasonable regime”, referring to the Iranian leaders who have replaced those killed in the war, but issued a new warning over the Strait of Hormuz.
He said the U.S. would obliterate power plants, oil wells and Kharg Island, from where Iran exports much of its oil, if a deal was not reached soon and the strait was not opened.
The failure to secure a peace deal has prompted the European Union’s energy chief to warn member states to prepare for a “prolonged disruption” to energy markets.
Higher oil and fuel prices have also started to weigh on U.S. household finances and are a political headache for Trump and his Republican Party before November midterm elections.
The U.S. national average retail price of gasoline crossed $4 a gallon for the first time in over three years on Monday, data from price-tracking service GasBuddy showed. Tightening global supplies have pushed benchmark Brent crude up 56% this month, the largest rise on record, to above $113 per barrel.
NEW ATTACKS
The war has continued to spread, with Iran-aligned Houthis in Yemen entering the war by firing at Israel, and Turkey reporting on Monday that a ballistic missile launched from Iran had entered Turkish airspace before being shot down.
The war has also revived conflict between Israel and the Iran-backed Lebanese group Hezbollah, while Iran, which has the highest casualty toll in the war, has fired at targets in Gulf Arab states, where the U.S. has military bases.
Iran’s military spokesman said targets in its latest attacks included “hideouts” of U.S. military personnel in five bases in the region and in Israel.
Blasts echoed through Dubai on Tuesday, and Saudi Arabia’s civil defence said falling debris caused limited damage after a drone was intercepted in Kharj province.
Explosions were heard in Tehran and residents in the eastern Pirouzi district reported power outages, Iran’s Tasnim news agency said.
A strike on a Shi’ite Muslim congregation hall in the northwestern Iranian city of Zanjan killed three people, a provincial official told Iranian media.
Israel’s military said four of its soldiers had been killed in southern Lebanon, where three United Nations peacekeepers from Indonesia have been killed in two separate incidents.
U.S. SOLDIERS ARRIVE IN THE REGION
Thousands of soldiers from the U.S. Army’s elite 82nd Airborne Division have started arriving in the Middle East, two U.S. officials told Reuters on Monday, part of reinforcements that would expand Trump’s options to potentially include a ground assault in Iran.
The White House said Trump wanted a deal with Iran before an April 6 deadline for Iran to open the Strait of Hormuz.
The Wall Street Journal reported Trump had told aides he is willing to end the military campaign even if the strait remains largely closed and leave a complex operation to reopen it for a later date. [MKTS/GLOB]
Asked about the report, the White House referred to comments made by Secretary of State Marco Rubio, who told Al Jazeera the strait would be open “one way or another” after the U.S. military operation.
(Reporting by reuters bureaux; Writing by Lincoln Feast and Timothy Heritage; Editing by Michael Perry and Sharon Singleton)
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