WHAT do Iraq, Pakistan, Japan, Russia, France, China, India, Malaysia and Oman have in common?

Right now, they form the flexible club of nations who have considered the range of outcomes to the current Middle East Gulf crisis and see a variation of the scenario where Iran remains a steward of seaborne trade in the Strait of Hormuz.

It is not an exclusive club and, depending on what happens next militarily, it is likely to grow as states take the pragmatic step of seeking Iran’s approval to move ships through. Several other states are known to be engaging directly with Tehran on the issue of safe passage for ships as mid-term energy security is weighed up against the diplomatic risk.

The only membership criteria appear to be a willingness to sufficiently distance themselves from US and Israeli operations. But how distanced and which affiliations will be blocked? That much remains unclear for now.

The range of outcomes are complicated and nuanced, but ultimately they can be reduced to a binary question of whether Iran manages to retain some form of lasting control over the strait.

At that point it becomes a question of which ships and which affiliations will be moving, and which won’t.

Whether a toll is being collected, either financial or political is a nuance yet to be determined. The legal grey zone in which that leaves ship operators remains a risk to be dealt with later for some.

But there are bigger risks at play here. Now that Hormuz has been closed once, the risk that it can be closed again is a long-term strategic issue that will colour trading decisions and geopolitical affiliations far beyond the immediate conflict.

Long term, the concentration of so much global commerce through a single contested corridor has already sparked a rush for resilience investment. New pipelines, new port developments and new land bridge arrangements are all in train.

But there will remain a core trade that relies on the Hormuz maritime chokepoint and in all but the most extreme scenarios, which will require Iran engaging in some form of future agreement.

The details of what that agreement looks like is not something the shipping industry gets to determine, but even with national agreements in place a return is not going to be quick or easy.

Recent developments form the Red Sea to the Black Sea have repeatedly pointed to the fact that seaborne trade is being divided down geopolitical lines. The current situation in the Strait of Hormuz only seems to be accelerating that trend.

Richard Meade
Editor-in-chief, Lloyd’s List