THE security environment for commercial shipping in the Middle East Gulf deteriorated sharply over the past 24 hours. Yet the latest attacks highlight a paradox that has come to define the US-Iran conflict: growing threats to merchant vessels are doing surprisingly little to halt trade.

Escalating hostilities between Washington and Tehran have widened the risk map far beyond the Strait of Hormuz. US forces reportedly struck five Iranian tankers, sinking one after an alleged attack on a US Navy warship. Iran, meanwhile, has targeted vessels as it escalates attacks against both military and commercial targets.

The consequences for shipping were immediate. Drone strikes hit a Panama-flagged tanker in Iraqi waters and a Gibraltar-flagged bunker tanker near the UAE, leaving one seafarer dead, another missing and vessels damaged. In case it was not already clear, the threat is no longer confined to the narrow waters of Hormuz but now extends across the Middle East Gulf, Gulf of Oman and Iraqi territorial waters.

The sight of a damaged Saudi tanker, struck by Iranian ordnance in Hormuz 10 days ago and now under tow by salvors with a visible oil slick trailing behind it, points to a mounting environmental risk as attacks on tankers become more frequent.

Yet despite the violence, shipping activity continues largely unabated.

August saw more than 190 non-Iranian-linked vessels enter the MEG, the highest monthly total since the conflict began and the first month since March in which inbound traffic exceeded outbound movements.

Even as the latest reports of drone strikes emerged, Lloyd’s List Intelligence analysts were tracking 17 ship-to-ship transfers around the strait on Wednesday. Satellite imagery showed some operators conducting transfers in daylight rather than under cover of darkness, suggesting a growing confidence in established trading patterns despite the threats.

The core MEG oil exporters and the shipowners serving them appear increasingly determined to maintain flows. Logistics chains have adapted, risk-management practices have evolved and commercial incentives remain powerful.

Even Iran’s latest attempt to impose control via its own list of 56 vessels deemed “banned” from transiting Hormuz has so far failed to deter transits. Many of those on that list have continued trading through the waterway regardless.

That resilience should not be mistaken for improved security. Bloomberg reporting this week suggests Iranian officials are preparing for a prolonged conflict and have adopted a more aggressive posture towards US naval and commercial targets. With both sides showing little appetite for compromise, the risk of further attacks remains elevated.

The Middle East Gulf shipping market may be proving remarkably adaptable, but it is doing so in an environment that is becoming steadily more dangerous.

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

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