A return to a major conflict in the Middle East has focused attention on the rising threat to shipping in the region from state-backed attacks — and the ability to do anything about it.
Elisabeth Braw, a senior fellow at the American Enterprise Institute, is developing a new threat tracker that charts the increasing number of incidents and harassment of global shipping since 2019 by states and their proxies.
Braw points out that a single case of disruption can have an outsized effect, such as the global impact on grain prices and shortages following Russia’s decision to pull out of the Black Sea Grain Initiative, its attacks on port facilities and threats against shipping.
And she said a trend of increased harassment and seizures suggests that the decades-old international consensus between states not to target shipping is fraying at the edges.
The three hotspots that Braw has identified as part of her research are unsurprising: The Black Sea, following Russia’s invasion of Ukraine; the South China Sea, where territorial disputes have raised tensions; and the oil traffic chokepoint at the Strait of Hormuz.
Braw’s threat tracker identifies Iran as being behind 30 incidents targeting global shipping since 2019 — more than double that of the next country, Russia.
The Tehran-backed Houthi regime in Yemen is responsible for another six incidents, mainly in the Red Sea on the access route to the strategically important Suez Canal.
Potential Iranian involvement in the Hamas attacks on Israel — denied by Tehran — has raised concerns about the threat of an escalation of conflict in the Middle East that would have a larger impact on shipping than the current muted impacts.
Shipbroker BRS has warned that the largest threat to tankers would be from pulling the likes of the US into the dispute. Groups allied to Iran in Iraq and Yemen have threatened reprisal attacks if the US moves to aid Israel.
BRS said this would increase the threat to shipping in the eastern Mediterranean, Red Sea and Middle East Gulf before the rest of the Opec+ grouping of oil producers ship more crude to keep prices in check.
The recent history of the region has made clear that tensions between the US and Iran have a significant impact on shipping.
Under one potential scenario, the US would more rigorously enforce its sanctions on Iranian oil following the attacks by Hamas. Russia could step in to replace Iranian barrels bound for China, while Saudi Arabia increases exports as prices rise in a tightened market.
Oil prices rose at the start of the week but had steadied by Wednesday after the US prepared to bolster its fleet in the region and warned Iran against getting involved in the conflict. It said it had no evidence of Iranian involvement in the plot and had sought to avoid embroiling a much bigger military threat than Hamas into the dispute. Saudi Arabia has also said it was working with regional partners to prevent an escalation.
Ripple effects
Even if there were a broader escalation, Iran would not be in a position to enforce its previous threat to block the Strait of Hormuz. Blocking the strait would restrict its own exports, which hit the highest level for nearly five years in May.
Iran’s tactics have been largely viewed as a response to US pressure, with senior figures threatening reprisals following the seizure of Iranian oil from the Greek-operated Suez Rajan this year.
And yet the ripple effects will play out far beyond the conflict. Analysts have warned that Russia could benefit from the US shifting its focus from the war in Ukraine to supporting Israel.
The conflict also provides added justification for Russia as it looks to tap the Northern Sea Route through Arctic waters off its uncontested territory to ship oil and gas.
One of the reasons for expanding the trade route with the retreat of sea ice with global warming is to ensure the security of supply after disruptions from geopolitical disputes and Somali piracy.
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