Update: Two Tankers Catch Fire After Collision Near Strait of Hormuz

Two giant ocean-going tankers collided and caught fire and two other ships were approached by Iranian boats near the Strait of Hormuz energy chokepoint, rattling global oil and shipping markets already on high alert.

The Front Eagle, an 1,100-foot (335-meter) supertanker known as a very large crude carrier, and a smaller vessel called the Adalynn, crashed into each other off the coast of the United Arab Emirates at 00:15 local time on Tuesday, Frontline Plc, the owner of the first vessel said by email. The incident was “navigational” and “unrelated to the current regional conflict,” it said.

Separately, two vessels were hailed by Iranian small craft near the vital waterway in the last 36 hours, the Joint Maritime Information Center said in a daily update.

“Though not out of the ordinary, it remains noteworthy during regional tensions,” according to the Bahrain-based naval coalition that seeks to keep commercial shipping safe in and around the Persian Gulf.

Shipping through Hormuz is under intense scrutiny because the waterway is the conduit for millions of barrels of Middle East oil every day, and Iran has previously threatened to close it in times of conflict. There’s no sign of that so far, but traders are still watching carefully for any signs of disruption.

Forward freight agreements 鈥� derivatives that traders use to bet on or hedge shipping costs 鈥� rallied after the earlier collision, according to two people who follow those prices. They were between 70 and 74 industry standard Worldscale points on Tuesday, up from between 65 and 70 points a day earlier.

The derivatives had slumped during Monday’s trading session after a report that Iran was seeking to de-escalate the conflict.

Israel’s airstrikes, which started Friday and have continued since, sent oil tanker rates from the Middle East surging more than 50%.

While there’s been no direct intervention from the Persian Gulf country, the JMIC warned on Tuesday of persistently high levels of electronic interference. Such activity pressures crews to step up visual lookouts and use more traditional systems like physical navigation maps, several owners said.

UK-based maritime security agency Vanguard Tech said in an alert seen by Bloomberg that there was no initial indication of “foul play” regarding the collision, with fires contained and crews reported safe.

The Adalynn has been loitering in the Gulf of Oman since May.

According to a from UAE’s national guard, 24 crew members on the Adalynn were rescued. Frontline confirmed its crew was safe as well.

Still, news of the collision caught the attention of shippers and oil traders in morning trading in Asia and the Middle East as such incidents are very rare in Hormuz.

Front Eagle appeared to have been affected by signal jamming on June 15 and 16 as it sailed past the Iranian port of Assaluyeh, according to ship-tracking data, although that wasn’t close to the crash site. The supertanker was headed to China, from Iraq’s Basra oil terminal, according to vessel tracking data compiled by Bloomberg.

The 23-year-old Adalynn sails under the Antigua and Barbuda flag, and its insurer data are not on industry databases. It has been frequently sighted plowing the route between Russia’s Ust-Luga, in the Baltic Sea, and Vadinar on India’s west coast. Front Eagle is a 2020-built tanker sailing under the Liberian flag.

Emails sent to Oceanpack Ship Management, the listed owner of Adalynn, went unanswered.

Ship-tracking data reviewed by Bloomberg shows the tankers were seen sailing near each other off the Gulf of Oman, with their paths eventually crossing.

The waters off the UAE’s Khor Fakkan and Hormuz are very congested, as they serve as a gateway to important crude oil and fuel suppliers within the region, including Saudi Arabia, Iraq, Iran and Abu Dhabi.