In September, crude oil will flow through the Strait of Hormuz again, as it did in the times before the Iran War. But Tehran reacts quickly and launches a new wave of attacks on oil transporters. Early signs indicate that the regime could be successful with its intimidation tactics.
Every day billions of people at gas stations in Germany and the rest of the world feel the consequences of Donald Trump and Benjamin Netanyahu's war in Iran. What happens in the Strait of Hormuz has an impact on the global economy and therefore also on the lives of people around the world. That's why reports from the Strait in recent weeks have raised hopes of an improvement in fuel prices: Crude oil exports through the Strait of Hormuz on a weekly average were now even slightly higher than before the war. But a new wave of attacks by Iran is endangering the positive trend, according to the Wall Street Journal (WSJ).
Iran attacked at least eight ships last week in response to the increasing number of ships transiting the strait in September. Previously, several days had passed without any attacks. The Islamic Revolutionary Guards Navy also warned ships in a radio message that they would be targeted if they chose the US-backed route. “Do not trust the US Navy, do not use the southern corridor under any circumstances and do not endanger your life,” the WSJ quotes. "Their goal is to gain control of the Strait of Hormuz through intimidation," an expert told the New York Times (NYT).
High exports “were never sustainable”
According to analysts, the new attacks could already have their first consequences. However, it is still difficult to pinpoint this fear in numbers, as real data can only be read with a delay. That's because many ships sail with their transponders turned off to avoid appearing on the Iranian military's radar. However, Rory Johnston, founder of oil research firm Commodity Context, estimates that supplies have fallen by two to three million barrels per day since the Iranian attacks. The numbers could trend upward as more precise data becomes available, Johnston told the WSJ.
The export pace of the past few weeks has been impressive, said Johnston. “However, it was never sustainable and cost a lot.” According to him, Persian Gulf oil producers pay between $30 million and $40 million for a round trip through the Strait of Hormuz. That equates to $15 to $20 per barrel, before insurance costs are taken into account. One reason for the increased volume of deliveries is that exporters want to get their oil out of the country as quickly as possible before feared new escalation, said Johnston.
According to the NYT, in desperation, countries like Saudi Arabia and the Emirates are offering tanker operators, in some cases, 10 times pre-war rates. And these costs speak to the risk that the crews are taking. According to the report, about two dozen crew members died as a result of the mutual attacks in September. Due to the sharp increase in transport costs, the oil that reaches consumers remains extremely expensive despite increased exports.
US Navy attacked Iranian radar stations
According to the WSJ, the fact that the Iranian Navy attacked fewer ships in September also affected the US Navy. It had recently increasingly attacked Iranian radar and radio stations near the Strait of Hormuz, thereby limiting Tehran's options. This made comprehensive monitoring of shipping traffic through the strait more difficult. Since the spring, the US military has also been offering the crews of oil tankers air protection, which is intended to prevent the risk of Iranian missile strikes.
The US had also repeatedly threatened to retaliate against Tehran's attacks and to target Iranian oil tankers. However, a US official quoted by the WSJ now reports that the US military has backed away from this plan. The reason for this is a series of Iranian missile attacks on a US air base in Jordan.
Shipping companies are also trying to avoid Iranian attacks through new routes, for example along the northern coast of Oman. Experts say Kuwait, Saudi Arabia and the United Arab Emirates are chartering large oil tankers to leave the Persian Gulf via the Strait of Hormuz and then transfer the oil to their customers' ships out of harm's way in the Gulf of Oman. During these maneuvers, the large oil tankers are supposed to sail through the waterway for weeks without transponders.
Iran leads “endurance competition”
Even as Iran's control over the Strait of Hormuz gradually declines, one key fact remains: the regime can still make transportation difficult enough to keep prices high around the world. With attacks like those in the past few days, Tehran is ensuring that the pressure on the USA does not let up. Consumers around the world are the main victims of the ongoing conflict.
Furthermore, the Strait of Hormuz is just one of the tools Iran can use to control the price of oil. If the US actually gains full control of the strait, Tehran could order Yemen's Houthis allies to escalate the situation in the Red Sea. “The Iranians see this as an endurance competition,” Iran expert Hamidreza Azizi told the NYT. "They could escalate the situation if the price of oil falls or if they believe that the Americans will attack again. Escalation is their main means of pressure against the US."
