Iran seizes foreign tanker, U.S. vows to protect vital Gulf waterway

by Reuters
Thursday, 18 July 2019 15:58 GMT

(Adds Guards chief, Iranian president, Russia's Lavrov)

* Iran impounds foreign tanker smuggling fuel

* Oil prices rise on the report

* Move adds to tensions in major shipping waterway

* Iran, U.S. at loggerheads over sanctions, nuclear pact

* Tehran urges Europe to do more to save the deal

By Parisa Hafezi and Alexander Cornwell

DUBAI, July 18 (Reuters) - Iran said on Thursday it had seized a foreign tanker smuggling fuel in the Gulf, and the U.S. military commander in the region said the United States would work "aggressively" to ensure free passage of vessels through the vital waterway.

The United States blames Iran for a series of attacks on shipping in the world's most important oil artery since mid-May, accusations Tehran rejects but which have raised fears the long-time foes could stumble into war.

It was unclear if the impounded ship was the same vessel Iran towed to safety on Sunday after sending a distress signal. Iranian state television had earlier said it was the same ship but the Revolutionary Guards statement did not confirm that.

The Guards said the impounded ship was smuggling one million litres of fuel in the area of Larak Island in the Gulf and had 12 foreign crew.

Oil prices rose after news of the seizure amid rising tensions between Tehran and the West over the safety of shipping in the Strait of Hormuz, a vital gateway for energy exports.

Brent crude futures were up 54 cents at $64.20 a barrel by 1230 GMT after hitting a session high of $64.46.

Reuters reported on Wednesday that shipping companies were hiring unarmed security guards for voyages through the Gulf as an extra safeguard.

Although Iran has yet to name the vessel, shipping industry sources said they believe it to be the MT Riah. Refinitiv data showed that the last signal received from the vessel was on Sunday when it was in the Strait of Hormuz off the Iranian island of Qeshm, heading towards Oman from Larak Island.

Washington said it was aware of the report but had no evidence "at this time to suggest Iran's claims are true".

"The United States will continue to work with our allies and partners to safeguard global commerce and support freedom of navigation," said a senior U.S. administration official.

SHIPPING LANES

The tanker's registered manager is Prime Tankers in the UAE. That company told Reuters it had sold the tanker to another UAE-based company, Mouj al-Bahar.

An employee at Mouj al-Bahar said that the firm did not own it but had been managing the vessel up to two months ago, and that it was now under the management of a company called KRB Petrochem. Reuters could not reach KRB Petrochem for comment.

Iran, which has some of the world's cheapest fuel prices due to heavy state subsidies and the fall of its currency, has been fighting rampant fuel smuggling by land to neighbouring countries and by sea to Gulf Arab states.

Since mid-May, attacks on tankers near the Strait of Hormuz have unsettled crucial shipping lanes that link Middle Eastern oil producers to markets in Asia, Europe, North America and beyond.

Iran denies involvement but has threatened to respond robustly to U.S. sanctions that have followed President Donald Trump's abandonment of a 2015 treaty in which Iran agreed to restrict nuclear work in return for the lifting of sanctions.

President Hassan Rouhani urged Europe to step up its efforts to salvage the pact in a phone call with French counterpart Emanuel Macron. Russia, another party to the pact, also said Europe should be clearer in its position on the agreement.,

Tehran says it will continue to reduce compliance with the accord until it is allowed to resume normal oil sales, and has demanded European parties to the deal rein in the United States.

SEEKING SUPPORT

Washington, however, says it wants to increase pressure on Iran to renegotiate the accord, discuss its ballistic missile program and modify its behaviour in the Gulf, where the United States is allied to several Arab states opposed to Iran.

Iran's clerical rulers have ruled out renegotiating the nuclear deal or holding talks on its missile program, which it says is purely defensive.

U.S. Central Command chief General Kenneth McKenzie meanwhile said Washington was talking to several countries about ensuring freedom of navigation in the Gulf. He was speaking in Riyadh at a news conference with General Prince Fahd bin Turki, commander of the Saudi-led coalition fighting the Iran-aligned Houthis in Yemen.

Washington has beefed up its military presence and is asking allies to help protect the strategic waters off Iran and Yemen. The U.S. Fifth Fleet, based in Bahrain, says Gulf Arab states have stepped up patrols.

Revolutionary Guards commander-in-chief Hossein Salami said Iran had adopted a defensive strategy but warned that "if our enemies make any mistakes....our strategy can become an offensive one, " Iranian media reported.

Britain urged Iran to ease tensions in the Gulf on Thursday and Defence Secretary Penny Mordaunt told a defence conference Britain would continue to protect shipping and the free flow of goods in that area.

Iran accused Britain of piracy and warned of repercussions after Royal Marines seized an Iranian tanker off Gibraltar on July 4 on suspicion it was shipping oil to Iran's ally Syria, in breach of EU sanctions on that country.

(Additional reporting by Tuqa Khalid in Dubai, Jonathan Saul in London Writing by Michael Georgy Editing by Jon Boyle and Angus MacSwan)

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