Shippers on Edge Around Strait of Hormuz After Israel-Iran Escalation

Following the Israel-Iran flare-up in the Middle East, the UK and Greece have cautioned their commercial shipping companies to be extra careful and log all voyages through the world’s key oil transit chokepoint, the Strait of Hormuz.

Israel launched overnight a series of coordinated airstrikes on Iran, targeting nuclear facilities in what it describes as a decisive move to prevent the Islamic Republic from becoming a nuclear power.

Iran has vowed retaliation and launched drones at Israel on Friday.

The shipping industry fears an escalation could hit commercial vessels traveling around Iran.

So the Greek and UK authorities have advised the ships flying their flags to avoid the southern Red Sea and the Gulf of Aden, according to notices and advisories seen by Reuters.

“Due to developments in the Middle East and the escalation of military actions in the wider region, the (Greek) Ministry of Shipping … urgently calls on shipping companies to send … the details of Greek-owned ships that are sailing in the maritime area of the Strait of Hormuz,” Greece’s shipping association said, as carried by Reuters.

The United Kingdom Maritime Trade Operations (UKMTO) said in a situational report on Friday that “the events over the past 24-hours have increased the likelihood of regional conflict to Significant.”

It advises that “Owners and charterers continue to conduct thorough threat and risk assessments well in advance of entering the Arabian Gulf and implement necessary security and risk mitigation measures while operating in the region.”

Threat remains elevated until further notice for vessels operating in or transiting the Arabian Gulf, Strait of Hormuz, and Northern Arabian Sea, UKMTO said.

The shipping industry and oil market participants fear a potential disruption to oil supply from the Middle East in case of further escalation. The worst-case scenario would be a closure of the Strait of Hormuz, the most vital oil shipping lane in the world. More than 20 million barrels of crude – around a fifth of global daily consumption – pass through the Strait every day.

By Charles Kennedy for Oilprice.com

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