Oil spill reaches UAE beaches as October becomes the worst month for Hormuz shipping attacks

October has been the worst month for attacks on commercial shipping in the Strait of Hormuz and nearby waterways^1,2. An oil spill from a tanker attacked near the strait is now spreading along the coastline of the United Arab Emirates, forcing the closure of some beaches³. The UAE temporarily closed Al Hamriyah beach in Sharjah as a precaution against marine pollution from the spill⁵.

Iran has repeatedly targeted cargo vessels using the southern section of the waterway, and earlier this week Iran’s Revolutionary Guards issued a statement on attacks on shipping⁴. The Guards’ navy now says two supertankers struck naval mines in the strait, and that the vessels, carrying more than 4.5 million barrels of crude oil, were abandoned by their crews after explosions and fires⁶. That account comes from the Guards and has not been independently confirmed in these reports⁶.

Why it matters to investors

Oil markets are sending mixed signals. Brent crude has hit a five-month high even as physical crude prices in the Middle East slide⁸. Oil climbed above $114 a barrel after Houthi attacks in Saudi Arabia and growing concern about shipping through the Bab el-Mandeb strait⁹.

Physical prices tell a different story because flows through Hormuz have held up despite the attacks⁷. A cargo of Iraqi Basrah Medium crude was sold at a discount of almost $10⁷. In March, when the strait was virtually closed and no crude could move, the Oman-Dubai differential had soared as high as $65 a barrel⁸.

The US military says its naval blockade of Iran has now reached 100 days and has halted all of Iran’s seaborne imports and exports¹⁰. US Central Command said the blockade has prevented $25 billion in Iranian oil exports¹¹. These are the US military’s own figures^10,11.

What to watch

The spill adds an environmental and commercial cost on the UAE coast to the direct risk to shipping^3,4. The record number of attacks in October raises the question of how long traffic through the strait can keep moving at current levels^1,7.

The gap between a rising Brent price and weaker physical Gulf grades is the measure to follow^7,8. It shows whether traders are pricing the risk of future disruption more heavily than the oil that is actually reaching buyers^7,9.