A Singapore ship goes down as Hormuz risks rise

Hello, this is Hui Jie writing to you from Singapore. Welcome to another edition of CNBC’s Daily Open.

Tensions in the Strait of Hormuz have risen after a Singapore registered ship was sunk in the critical waterway, and Iran said it was “counting the moments” until it can strike U.S. warships.

Oil markets responded to mounting worries, with prices of the critical commodity extending gains, while U.S. President Donald Trump’s deal with Russia for supplying diesel is unlikely to materially impact prices.

A major escalation in the Strait of Hormuz has seen a container ship sunk in the waterway, as Iran escalated its attacks on commercial vessels.

The GFS Pride, registered in Singapore, sank after it was struck by an unidentified projectile and caught fire. The ship’s 21 crew members were safely evacuated and no injuries were reported, according to the Maritime and Port Authority of Singapore.

“Such attacks are unprovoked, unjustifiable and a breach of international law,” the Singapore maritime authority said in a statement Wednesday.

A second vessel, the GFS Giselle, was also hit and sustained damage to its hull, but managed to arrive at safe anchorage and none of its crew were hurt, the authority added.

Tehran has also ratcheted up its rhetoric, saying it was ‘counting the moments’ until it can strike U.S. warships in the Strait.

Islamic Revolutionary Guard chief Ali Ozmaei reportedly said Wednesday, “If the Americans think the Strait of Hormuz is open, let them come closer. We are impatient to sink American warships.”

Washington’s forces, however, disputed the claims of Iranian control, with U.S. Central Command saying “American forces and regional partners clearly control the Strait of Hormuz.”

The recent development, along with additional attacks by Tehran-backed Houthi rebels on oil giant Saudi Aramco’s facilities in Saudi Arabia, have pushed oil prices higher, with international benchmark Brent up at $106.06 a barrel, while U.S. West Texas Intermediate advanced to $95.09 a barrel.

High energy prices have also contributed to a hot inflation report in the U.S., with the consumer inflation rate for September up 3.7% year on year, higher than expectations of 3.6%.

The energy index jumped 5.2% as tensions continued between the U.S. and Iran in a war launched in late February that shows no signs of ending anytime soon.

Core CPI — which strips out prices of food and energy — was up 2.6% on an annual basis, compared with estimates of 2.5%.

Markets slipped on the news, with the S&P 500 pulling back 1.11% and the Nasdaq Composite shed 1.88%. Tracking Wall Street declines overnight, Asia markets tumbled Thursday.

The CPI report comes as oil prices remain elevated and consumers pay more for gasoline, which is averaging at $4.33 a gallon, compared to about $3.08 per gallon…