An explosion has struck an Iranian oil tanker off Saudi Arabia’s coast, Iran’s state-run news agency and other media have reported.

There was no immediate acknowledgement from the kingdom.

Reports said the explosion happened on Friday off the coast of Jeddah on the Red Sea.

The US Navy’s 5th Fleet, which oversees the region, did not immediately respond to a request for comment.

The reported explosion comes after the US alleged that Iran had attacked oil tankers near the Strait of Hormuz, which was denied by Tehran.

Oil extended gains after a reported explosion on an Iranian tanker near the Saudi Arabian port city of Jeddah.

Futures rose as much as 1.6% in London.

An explosion in a National Iranian Oil Company tanker has set it on fire and caused heavy damage, spilling crude into the Red Sea, Reuters reported, citing ISNA.

The report of the explosion will reignite concerns about potential conflict in the Middle East and threats to supply from the world’s most important crude-producing region.

Oil has still lost about 19% from its peak in April as the prolonged dispute between Beijing and Washington adds to a bleak economic outlook.

The trade spat has cast a shadow over oil demand and a failure to reach a deal would be “catastrophic” for the market, Secretary-General Mohammad Barkindo said in London. U.S. crude stockpiles and output expanded last week, contributing to ample global supplies.

“Subdued global growth and rising U.S. shale production will cap bullish” price gains in the fourth quarter, said Benjamin Lu, a commodities analyst at Phillip Futures Pte in Singapore.

Oil-price optimism may be short lived, he said.

Brent crude for December settlement rose as much as 93 cents, or 1.6%, to $60.03 a barrel on the London-based ICE Futures Europe Exchange. The contract is up 2.7% this week.