Last week’s attacks on two tankers in the Gulf of Oman have ratcheted up tension in the Middle East. Lloyd’s List has reported a tenfold rise in war risk marine rates for tankers.
Iran has increased its production of enriched uranium and says that on June 27 it will breach the quantity limit set under the nuclear deal agreed in 2015 with the P5+1 group of countries, the US, France, UK, China, Russia and Germany.
The US has said it does not want war, but its aim is to stop Iran developing a nuclear weapons capability, and that all options, including military action, are possible. The US withdrew from the nuclear agreement in May last year, later re-imposing unilateral sanctions on Iran.
The June tanker attacks follow four incidents that damaged commercial tankers off the UAE port of Fujairah in May and drone attacks targeting Saudi Arabia’s East-West pipeline system the same month.
The threat is that conflict between Iran and the US will close the Strait of Hormuz, affecting 18-19 million b/d of oil exports from Iraq, Saudi Arabia, Kuwait and the UAE, about one-fifth of global oil consumption, as well as oil, NGL and LNG exports from Qatar. Iraq would be limited to about 1 million b/d capacity on its northern export system via Turkey, including production from the Kurdish autonomous region, while Kuwait and Qatar have no alternatives.
Taken as a whole, the attacks appear specifically designed to threaten oil…