Vessels Struck Near Oman and Iran; Strait of Hormuz Remains Closed

At least two vessels were struck over the weekend in waters near Oman and Iran, according to the United Kingdom Maritime Trade Operations Centre. Tehran reiterated its position on Sunday that the Strait of Hormuz would not reopen unless its conditions for ending the war with the U.S. are met. On Saturday, the UKMTO reported that a crude oil tanker was hit by an unknown projectile four nautical miles east of Oman. Another tanker was reported as being similarly struck on Sunday in the Strait of Hormuz, causing damage to its engine room. Attacks on shipping in the strait, through which about a fifth of the world's oil supplies moved before the start of the U.S. and Israel-led war on February 28, have been occurring regularly for weeks. Iranian state media agency Nour News quoted Parliament Speaker Mohammad Bagher Ghalibaf as saying, "The Strait of Hormuz will not open until Iran's seven conditions based on the Islamabad Memorandum are met, and Iran will not regulate its national security with tweets from American officials." President Donald Trump and Iranian President Masoud Pezeshkian signed an interim deal in June, known as the Islamabad Memorandum of Understanding, which resulted in a brief hiatus in fighting. Tehran's conditions for allowing ships to proceed freely through the Strait of Hormuz include a halt to U.S. "acts of aggression," an end to the U.S. naval blockade of its ports and economic warfare, and the release of Iranian assets. A key demand of the U.S. has been that Iran dismantle its nuclear weapons program. Meanwhile, Saudi Arabia's energy infrastructure reportedly came under renewed attacks. Reuters reported on Saturday that Yemen's Iran-aligned Houthis claimed to have targeted a facility owned by Saudi Arabian oil giant Aramco in the capital Riyadh with ballistic missiles and drones. The group stated that the attack was in retaliation for Saudi attacks on Yemen's Sanaa and other provinces. A large plume of smoke and fire was reported above the facility, according to a witness. Saudi authorities have not commented on the reported attack, and Aramco did not immediately respond to CNBC's request for comment. If confirmed, this would mark the latest escalation in what has effectively become a second front in the Iran war. Some investors expect full-scale fighting to resume in the Middle East. Bader Al-Saif, founding president of Al-Saif Consulting, stated, "The situation is fluid and volatile. To me, as we are developing and looking at the situation, it's not a question of if, but when the conflict resumes full force," during an interview on CNBC's Access Middle East show on Friday. The ongoing attacks and the prospect of further escalation have driven energy prices higher in recent weeks, raising inflation expectations globally and putting upward pressure on government borrowing costs. Reports that the U.S. is sending a third aircraft carrier strike group to the Middle East, along with an amphibious force carrying 2,000 Marines, pushed crude oil prices higher on Thursday. However, prices edged lower on Friday after the Group of Seven nations announced the release of diesel and crude stocks to ease the burden on consumers. Brent crude futures, the international benchmark, lost 6 cents to close at $102.25 per barrel, while U.S. West Texas Intermediate crude shed $1.76 to settle at $91.11 per barrel.