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Iran Says It Shot Down a U.S. Drone Amid Escalating Tensions in the Oil Region

Iran said it shot down a U.S. drone near the mouth of the Persian Gulf, escalating already fierce tensions in an oil-exporting region that’s been on the brink of a military confrontation for weeks. Oil prices surged.

“We will defend Iran’s airspace and maritime boundaries with all our might,” Ali Shamkhani, secretary-general for the Supreme National Security Council was quoted as saying by state-run Islamic Students’ News Agency. “It doesn’t matter which country’s aircraft cross our airspace.”

Iranian media described it as a spy drone and said it was in Iranian airspace and was hit near Kuh Mobarak, on Iran’s southern coast.

Citing an unidentified U.S. official, Fox News reported that a U.S. Navy high-altitude drone was shot down in international airspace by an Iranian surface-to-air missile over the Strait of Hormuz, an oil shipment chokepoint.

The downing of the drone fanned fears that a military clash between the U.S. and Iran is just a matter of time. Tensions spiked after the U.S. tightened sanctions on Iranian oil sales in early May, sent military reinforcements to the region and provoked an increasingly squeezed Iranian government to pull back on some of its commitments under the 2015 deal that was meant to prevent it from developing a nuclear bomb. Washington quit the deal a year ago and reimposed sanctions to force Iran to rein back regional proxy militias.

Frictions flared further last week after an attack on two oil tankers outside the entrance to the Gulf. The U.S. blamed Iran, which has denied involvement. Iran on Monday warned European signatories that it would breach the nuclear accord, which had traded some sanctions relief for limits on Tehran’s nuclear program, as soon as June 27 unless they find a way to circumvent U.S. penalties.

Oil futures climbed as much as 3.3.% in New York. It spiked as much as 4.5% last week when the tankers were hit.

The reported drone downing followed a missile strike by Iranian-backed Yemeni rebels overnight on Saudi Arabia. President Donald Trump was briefed on that incident, and was “closely monitoring the situation,” White House Press Secretary Sarah Huckabee Sanders said on Wednesday night.

She did not provide further details, but a news agency operated by Iran-backed Houthi rebels in Yemen said that they had hit a power station in Jazan, on the southwestern coast of Saudi Arabia, with a cruise missile.

That report could not be independently confirmed. The Houthis have repeatedly attacked Saudi targets using drones and rockets since a Saudi-led military coalition backed by the U.S. entered the Yemeni civil war in 2015 on the side of President Abd Rabbuh Mansur Hadi.

Jazan province, which borders Yemen, has proven to be an easy target, in closer range than the capital and other major cities further inside the oil-exporting kingdom.

There were no indications from residents of Jazan that a catastrophic incident had taken place. Electricity and water supplies didn’t appear to have been affected and it wasn’t clear what, if anything, set the incident apart.