Oil spikes on Iranian tanker blasts

LONDON, Oct 12 (AFP) - Oil surged on Friday after an Iranian tanker was hit by suspected missile strikes off the coast of Saudi Arabia, sparking fresh conflict fears one month after attacks on Saudi oil facilities that were blamed by Washington on Tehran.

In foreign exchange markets, the British pound spiked amid signs that London and Brussels might still win the race against time and avoid a no-deal Brexit as a deadline looms.

World stock markets, meanwhile, powered ahead, boosted by hopes that Washington and Beijing are getting closer to a deal on trade.

“Global stocks continued to rally on the back of optimism the US and China will reach an agreement of some sort to prevent any further escalation in their bitter trade war,” said Fawad Razaqzada at Forex.com.

In commodities, Brent and New York crude contracts were catapulted higher as news of the suspected missile attack flashed across traders' screens just after 0600 GMT, ratcheting up geopolitical and supply tensions in the cruderich tinderbox Gulf region.

“This clearly puts fuel on the Middle East fire,” SEB commodities analyst Bjarne Schieldrop told AFP.

“After the attack on Saudi a few weeks ago, it's not a matter of if we get new comparable events -- but when, and how much.” On September 14 attacks on Aramco plants in Abqaiq and Khurais initially halved the kingdom's crude output and set oil markets alight.

Friday's blasts could escalate quickly and spell more global economic turmoil, according to Nordea Markets analyst Thina Margrethe Saltvedt.

“The risk premium is rising following the attack on the Iranian oil tanker, not because the tanker per se contains enough oil to squeeze the market, but the risk that this incident will be retaliated or more attacks would come either in Iran, Saudi Arabia or Iraq,” Saltvedt told AFP.

Saltvedt added: “The prices might move up sharply-- the sky is the limit in these worst case scenarios.