Middle East tanker threat worst since Iran war began as Red Sea attacks mount

Analysts say the threat to oil tankers in the Middle East is at its worst level since the Iran war began amid rising Middle East tensions, with sharply reduced traffic through the Strait of Hormuz and new Houthi attacks disrupting Red Sea routes that had served as an alternative. [1]

Threat to Oil Tankers Reaches Highest Level Since War Began

The threat to ships carrying oil in the Middle East is at its worst since the Iran war started, experts have said, after a spate of attacks on another key route in the region. [1] "In terms of threat to the trade of crude, we're at the worst period that we've been in since this since this crisis began," said Matthew Wright, an analyst at ship-tracking firm Kpler. [1] The warning comes after a number of attacks on vessels in the Red Sea, an alternative waterway that some tankers had been using since Iran blocked the Strait of Hormuz. [1]

Strait of Hormuz Traffic Plummets Amid Renewed Strikes

The number of ships passing through the Strait of Hormuz was just eight on Sunday and 11 on Saturday, compared with more than 100 per day before the war began, according to Kpler. [1] Before the conflict, about 20% of the world's oil and gas passed through the strait. [1] The temporary peace deal with the US struck in early June led to numbers rising again, but the resumption of strikes between the two countries roughly a month later have significantly reduced traffic. [1] Many ships have been "going dark" when crossing the strait, meaning they turn off their transponder to avoid detection. [1]

Houthi Blockade and Attacks Hit Red Sea Alternative Route

For much of the war, some ships carrying oil from Saudi Arabia had instead passed through an alternative shipping lane in the Red Sea, between the kingdom and west Africa. [1] The Iranian-backed Houthi militia announced what it called a blockade on Saudi Arabia's Red Sea ports on 20 July and the UK Maritime Trade Operations agency has reported several attacks on ships in the past week. [1] "Not only is the ongoing situation in the Strait of Hormuz constraining oil flows, but now a big factor that was helping to balance the market is now also under threat. It's a problem stacked on top of a problem," Wright said. [1] The number of commodity vessels that passed through the Bab el-Mandeb strait was 28 on Saturday and six of them had their transponders turned off, according to Kpler data, indicating that they were trying to avoid detection. [1] The number of ships loading crude oil for export to Asia passing through has dropped to about four per day, Kpler added, the lowest point since the start of the war. [1]

Trump Cancels Strikes as Talks With Iran Are Announced

Despite the talks with Oman, Iran has said that no deal is imminent that would reopen the strait to normal traffic. [1] Its foreign ministry spokesman Esmaeil Baqaei said any agreement would not lift the current restrictions while US "aggression" continued. [1] Oil prices fell sharply after Trump said he would cancel planned strikes on Iran based on the potential for upcoming talks. [1] Brent crude was trading 4.4% lower at $84.05 a barrel, after it fell as much as 7.3% to $81.55 a barrel earlier in the day. [1] Global oil prices fell sharply on Monday as traders reacted to U.S. President Donald Trump’s announcement that a planned military strike against Iran had been delayed and that new negotiations would begin. [5] Brent crude, the international benchmark for oil prices, declined about 4.8 percent in early trading to $83.73 per barrel. [5]

Shipping Industry Faces Complex and Deteriorating Risks

Tim Wilkins, the managing director of Intertanko, a trade body representing tanker owners, said the industry was "facing a broadening, deteriorating, and increasingly complex security situation". [1] "We now have the high-risk area going up to Saudi Arabian waters and extending into parts of the Red Sea. So that's having another impact on the market, on freedom of navigation as well." [1] A spokesperson for Hapag-Lloyd, the global shipping giant, said some of its vessels were still passing through the Red Sea but that it would "monitor developments closely and will adjust the network if circumstances change". [1] "If the Strait of Hormuz reopened, most ships could probably leave the region fairly quickly. However, restoring normal cargo flows would take much longer. Services have been suspended and ships redeployed elsewhere, so a return to normal flows would most likely take three to four months." [1] Peter Sand, chief analyst at Xeneta, another ship-tracking company, said the fighting had taken the shipping industry "back to to square one" and that things were in "a terrible state, regardless of which shipping type you're you're looking at". [1]

US Military Explores New Options to Pressure Iran

The request from a senior officer at the US military command carrying out President Donald Trump’s war with Iran came in an email: We need ideas. [3] “We are looking for new creative and unconventional ways to pressure and punish Iran,” an officer in US Central Command’s intelligence branch wrote in a message sent Wednesday to a broad group of military analysts, according to a source familiar with the message. [3] The email preceded Trump’s threat to launch new strikes against Iran, only to call them off over the weekend after regional officials — namely Saudi Arabia’s crown prince — intervened by calling the president and urging him to de-escalate. [3] For weeks, the US has hammered Iran with air strikes designed to degrade its ability to threaten shipping in the Strait of Hormuz and to bring Tehran back to the negotiating table, but there’s still no sign of a deal. [3] Both the Central Intelligence Agency and the Defense Intelligence Agency have recently assessed that the kind of bombing the US is carrying out is unlikely to shift the Iranian negotiating position. [3] The president’s most senior military adviser, Chairman of the Joint Chiefs of Staff Gen. Dan Caine, has acknowledged publicly that bombing alone is unlikely to accomplish all Trump’s previously stated objectives for the war. [3] “Air power has its limits,” Caine told lawmakers last month. [3]

What to watch next: Kpler's Wright said that while talks with Oman could be productive, any deal would need the involvement of the US and the fear is that current negotiations could be a "false start" without concessions on at least one side. [1]