Warning as Oil Tensions Increase Following Vessel Seizures

Maritime intelligence firm Dryad Global has raised the threat level for vessels transiting the Strait of Hormuz, Persian Gulf and Gulf of Oman as tensions between Iran and the US intensify.

The move comes after the US seized the cargo of four oil tankers which were due to travel to Venezuela. The oil was transferred to other vessels and is due to be shipped to the US after Us prosecutors filed a claim that the shipment was in breach of current sanctions.

The fear now is that Iran will respond in kind as it seeks to pursue a “tit for tat” campaign that will strengthen its ability to negotiate for the recovery of vessels and cargo.

Dryad say the move has heightened tensions and issued a warning to US and Saudi flagged vessels and vessels carrying US/Saudi interests in the region.

“Dryad Global has long assessed that US and Saudi flagged vessels, or vessels which carry US/Saudi interests, and vessels perceived by Iran to be complicit with either state in working against Iranian interests as facing an elevated and persistent risk within the Persian Gulf, Strait of Hormuz and Gulf of Oman during times of increased geo-political tension,” said the company. “As a result of the most recent incident resulting in the seizure of Iranian cargo, this risk is assessed to be heightened for all vessels carrying US related cargo.”

The firm added that currently it is estimated that US bound cargoes from the region are current 9-12 million barrels per month, which equates to 4-6 VLCCs of US bound cargo per month.

“In assessing this risk, the threat is viewed through the lens of ‘tit for tat’ actions,” added Dryad. “Iran is acutely aware that is actions are seen to be proportionate and thus legitimate by the international community, and the US is seen as the aggressor (or can at least be framed in such a way within the media landscape). Iran has followed a ‘tit for tat’ approach in its seizing of the Stena Impero in 2019, and its response to the US assassination of Qasem Soleimani earlier this year.

“This recent execution from Iran of this ‘like for like’ strategic worldview allows Iran to control the risks of escalation and mitigate against the potential for a military response by the US.”

The firm added: “Iran is also likely to seek to achieve an outcome which provides itself with a degree of leverage. In doing so, Iran can turn the course of events to its advantage, and Iran therefore has a much stronger position when negotiating for the release of vessels carrying its interests.”

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