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London — Iran's oil exports -- already hurting from US sanctions -- were struck a further blow Friday when one of the country's tankers, the Sabiti, was rocked by explosions as it sailed in the Red Sea near the Saudi port of Jeddah.

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It was the latest in a list of incidents involving oil facilities and shipping that have engulfed the Middle East of late, amid acrimony between the US and Iran in the world's largest oil-producing region.

News of the explosions on the Sabiti, a Suezmax tanker, saw ICE Brent crude futures spike more than 2% to above $60/b, before easing.

The National Iranian Tanker Company, which owns the tanker, confirmed the explosion in a statement, and said the oil leakage from the Suezmax had been stopped and the situation was under control.

Click here for full-size infographic

The Sabiti, carrying 1 million barrels of crude, was on its way northward toward the Suez Canal before the incident, according to data from Platts cFlow, trade flow software.

The Sabiti has been regularly used by Iran to export crude, even under current US sanctions, loading oil from its key terminals such as Kharg Island, Larak Island and Bandar Abbas in recent months.

"In two separate explosions, probably by missile hits, at 05:00 [local time] and 05:20, 60 miles from Saudi Arabian Jeddah port, the oil tanker's body exploded," NITC said, adding that two of the ship's tanks were damaged.

Shipping industry sources earlier told S&P Global Platts the Sabiti was on fire after being hit by a "foreign object" near Jeddah and was spilling oil.

"The oil tanker has not resumed its course yet ... we will shift the oil tanker course to exit the Red Sea," said NITC's managing director Nasrollah Sardashti, who was quoted by IRNA agency.

The explosion came almost a month after an attack on Saudi oil installations on September 14 which briefly halved the kingdom's output. The US and Saudi Arabia blamed Iran for the attacks but Iran has repeatedly denied these allegations.

Last week, Iran inaugurated a new air defense center at its Assaluyeh energy hub to secure shipping and civil flights, as the country girds for retaliation from last month's attacks on Saudi oil infrastructure.

President of energy consultancy SVB Energy International Sara Vakhshouri said these attacks suggest that Iran and its adversaries have entered into "a tit for tat war" by targeting each other's energy facilities.

"The mistrust between Iran and its Arab neighbors could intensify the tensions in the region," she said. "The potential miscalculations from each side poses a significant threat against the security of oil and gas supply and flow from their region and have an upward impact on the energy market and prices."

PLUNGING EXPORTS

Iranian oil exports have plunged in the past few months due to US sanctions, crippling the country's revenues.

Iran exported an estimated 400,000 b/d of crude and condensate in September, based on preliminary estimates compiled with Platts cFlow and shipping sources. That compared with levels of 1.95 million b/d in September 2018.

Iran's oil tankers are holding almost 55 million barrels of oil at sea, the highest since early January 2016, according to Platts estimates.

The majority of stored volumes lie off Iran's main oil terminals -- Kharg Island, Assaluyeh and Soroosh. Iran's tankers are also storing oil off the coast of the UAE, near the bunkering hub of Fujairah.

Iran last month pumped its fewest barrels since August 1988. The country saw production fall 70,000 b/d to 2.23 million b/d in September, with the dramatic drop in crude exports somewhat offset by a significant build in storage, according to the latest Platts OPEC Survey.

-- Eklavya Gupte, eklavya.gupte@spglobal.com
-- Aresu Eqbali, newsdesk@spglobal.com
-- Edited by Dan Lalor, daniel.lalor@spglobal.com