Two oil tankers were attacked last Thursday in the Gulf of Oman, the busiest and narrowest oil shipping lane in the world. Iran denied being responsible for the attack however President Donald Trump’s administration persist on giving Iran the blame.

The attack is the second incident in a month in the Gulf as four other oil tankers were attacked just off the United Arab Emirates, where again, US officials suspected Iran to be responsible. So what does this mean for investors?

Well if you’re an investor in the commodity, you will be cashing in on the war on oil as the prices spiked significantly following the recent attack. When an event such as an attack or oil spill occurs, the supply levels fall dramatically causing the price to increase.

The price per barrel of WDI crude oil jumped 11.6% over the last week from $51.14 the day before the attack to $57.07 by the end of yesterday. Similarly in May’s attack, the price climbed from $61.04 to $63.21 over the following week.

Despite a negative three-month return, the ETFS WTI Crude Oil ETC (CRUD) has a year-to-date performance of 20.9%, aided by the 9.6% rise over the last week.

ETFS WTI Crude Oil ETC YTD Returns – Source: Bloomberg

As matters calmed after May’s attack, the one-week price hike was followed by a two and a half week decline before the second attack. This time round, the oil supply could be limited for a bit longer as tension escalates between the US and Iran.

A US naval surveillance drone was shot down after Iran states it was flying within the country’s air space whereas the US says it was in international territory. In response, President Trump ordered a military strike on Iranian targets before cancelling the charge. Currently it is unclear what is the next move between the two nations but as tensions rise, the Gulf of Oman will become increasingly more dangerous and impact the supply of oil.