World's key energy choke point is under increasing threat

ONE of the global economy's growing sources of vulnerability is maritime disorder in the Middle East. With tensions mounting between Iran and the West, the most sensitive transportation choke point for global energy supplies is under increasing threat.

Late last month, an oil tanker operated by an Israeli-owned company was attacked by a drone off Oman, killing a UK and Romanian national. The United States, United Kingdom and Israel have blamed Iran for the attack, a claim it strongly denies.

Add to this combustible mix the apparent hijacking this month of a Panama-flagged ship in the Gulf of Oman. The vessel was seized off the coast of the United Arab Emirates as it neared the Straits of Hormuz through which one fifth of the world's oil, a quarter of liquefied natural gas, and half a trillion dollars' worth of trade passes. The rise in tensions between Teheran and the West, as the clock runs down on nuclear deal negotiations in Vienna between the two sets of powers, is not the first time in recent years that Iran has tested the resolve of Western powers. In summer 2019, for instance, with a transition of prime ministerial power underway in London, Iran seized a UK-flagged tanker as it headed to Dubai from the Iranian port of Bandar Abbas. With the global economy continuing to be lubricated by oil, despite a growing shift towards cleaner energies, the 2019 attack on the UK-flagged ship saw the Brent crude price spike straight after. To be sure, tankers guided by satellite can be redirected to replace ships in distress, but the oil and wider energy industry is nonetheless worried by the threat hanging over busy Middle Eastern shipping lanes and the valuable commodity cargo that travels through it.