Shipping threats in the Arabian Peninsula are increasing, according to the Baltic and International Maritime Council (BIMCO), the largest organization of shipowners in the world. This heightened risk is mainly due to the ongoing conflict between Israel and Iran, as well as the growing capabilities of Houthi rebels. These developments are affecting vital waterways, including the Strait of Hormuz, the Red Sea, and the Gulf of Aden.
Escalating Tensions Threaten Global Shipping
The conflict between Israel and Iran has significantly increased the risks for commercial shipping. After an Israeli attack on Iran’s nuclear facilities, BIMCO issued a warning regarding possible Iranian responses, which could include missile or drone attacks on merchant vessels in the Strait of Hormuz. Additionally, the threat from Houthi rebels in the Red Sea and Gulf of Aden has escalated, with the rebels now targeting ships associated with Israel or the U.S., as well as potentially other vessels.
Key Takeaways
- Increased Risk: Commercial shipping faces a rising threat in the Strait of Hormuz, Red Sea, and Gulf of Aden due to the Israel-Iran conflict and Houthi actions.
- Targeted Vessels: U.S. warships and merchant ships affiliated with Israel or the U.S. are considered primary targets, though attacks on other vessels are not ruled out.
- Economic Impact: Surging freight rates, increased insurance premiums, and potential supply chain disruptions are already being observed.
- Strategic Waterways: The Strait of Hormuz, a vital oil chokepoint, and regional transshipment hubs like Jebel Ali and Khor Fakkan are particularly vulnerable.
Strait of Hormuz: A Critical Chokepoint
The Strait of Hormuz, connecting the Persian Gulf and the Arabian Sea, is a crucial artery for global oil and gas shipments, handling approximately one-fifth of global oil shipments. While the U.S.-led Joint Maritime Information Center (JMIC) states the strait remains open, maritime experts warn of potential disruptions. Iran has previously closed the strait during the 1984 “Tanker War,” and any future closure or significant disruption would severely impact global energy prices and shipping costs.
Houthi Capabilities and Alliances
The threat posed by Houthi rebels to global shipping lanes is significantly increasing, driven by a complex network of political alliances, military suppliers, and financial support. A UN Security Council intelligence report reveals that the Houthis are enhancing their operational capabilities through partnerships with groups such as al-Qaida, al-Shabaab, Iran’s Revolutionary Guard, Hezbollah, and Hamas. This expanded network enables them to target ships far beyond their traditional territories, creating a risk level “not seen since the Second World War.”
Economic Repercussions for Shipping
The heightened security concerns have already led to significant economic impacts on the shipping industry:
- Soaring Freight Rates: Spot rates for routes from Shanghai to Jebel Ali have surged by 55% month-over-month. Tanker rates for Middle East-China and Middle East-Japan routes have also seen substantial increases.
- Increased Insurance Costs: Hull and machinery insurance rates for vessels transiting the Strait of Hormuz have risen by over 60%.
- Diversions and Delays: Shipowners are exercising extreme caution, with many opting to reroute away from high-risk areas, leading to longer transit times and increased fuel costs.
Recommendations for Shipowners
BIMCO advises shipowners to review security risk assessments and implement mitigation measures. Recommendations include:
- Rerouting away from the Iranian coast.
- Maintaining close contact with naval forces through UK Maritime Trade Operations (UKMTO).
- Increasing vigilance and lookout.
- Reporting suspicious sightings and events to UKMTO.
- Enhancing ship resilience through watertight integrity and readiness of damage control organizations.
BIMCO does not explicitly advise against navigating through conflict areas; instead, it stresses the importance of shipowners making informed decisions based on thorough security risk assessments. These assessments should take into account the potential threats, the vulnerabilities of the ship, and the acceptable levels of risk for seafarers and cargo owners.
Sources:
- Freight ships prepare for Israel-Iran conflict, Strait of Hormuz risks, CNBC.
- Strait of Hormuz, Red Sea shipping threat rising, maritime group warns, CNBC.
- Shipping threats rising in Strait of Hormuz, Red Sea, and Gulf of Aden amid escalating Israel-Iran conflict |
Today News, Mint. - Houthi threat to shipping growing thanks to ‘unprecedented’ network of support :: Lloyd’s List, Lloyd’s List.
