Israel’s assault on Iran represents a climax of the hostility between the two nations, as well as the wider conflict between Iran and the West. Obviously, the outcome of this war is uncertain. However, the possibility that the fighting may accelerate the normalisation of the shipping market should not be dismissed.
From the meagre reports available, it appears that the Israelis have attacked both military and political targets, complementing their previous suppression of the Iranian air defences. The reaction of the Iranian regime has been surprisingly quick in reaching out to both Tel Aviv and Washington, with reports on Monday, 16th, and Tuesday, 17th that Tehran was pressing for talks.
It appears that Iran’s strategic position has deteriorated. Its ‘proxy’ allies have weakened, with the exception of the Houthis. They are still firing missiles at Israel.
One further signal that the implications for shipping, and indeed air freight, are less serious than they could be is the failure of the Iranians to threaten the Strait of Hormuz. In the past the Iranians have launched attacks on ships passing through the Strait. Such attacks are a powerful tool in-terms of their ability to threaten both the export of oil from the Gulf but also access to the container terminals of the UAE. Iran has conspicuously not done this.
The strategic balance in the region seems to have shifted. Although the Houthi are quite autonomous, if Iran fails to deliver weapons to them and Tehran enters some form of agreement with the Israelis and the Americans it is likely that the operations of the Houthi’s will change.
The medium-term prospect could be that the Red Sea becomes less hazardous. Although major lines have publicly stated caution about conditions in the Red Sea, some large shipping lines are re-starting sailings through the Suez Canal. If there is some kind of agreement between Iran, Israel and the US in the coming weeks or months the implications for the shipping market could be significant.
Author: Thomas Cullen
Source: Ti Insight
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