Shipping Crisis Unfolds in Persian Gulf Conflict

The conflict between the US and Iran has taken a new turn as the focus shifts from oil to ships. Odessa oilman Kirk Edwards notes that for months, the dialogue had been centered around barrels of oil, with questions about production levels, oil passing through the Strait of Hormuz, and displaced oil.

However, Edwards points out that 'another energy crisis is developing right in front of us, the ships.' He explains that US forces have attacked multiple Iranian crude oil tankers, disabling two and destroying one, which later sank. Iran responded by threatening oil tankers in Kuwaiti and Bahraini ports and warning crews to evacuate.

The incident marks an escalation as commercial tankers are no longer just navigating through a war zone; they are becoming deliberate targets. Edwards cites UK maritime authorities, who have recorded 27 projectile strike incidents damaging vessels in and around Hormuz since July 6.

Before the latest escalation, about 125 commercial vessels per day would transit Hormuz. However, recent data shows that this number has dropped to just 10 vessels per day. Edwards warns that the focus may still be on the wrong metric: 'A tanker carrying two million barrels being destroyed does not just remove those two million barrels.'

The bigger risk is that tankers, although operational, may refuse to enter the Persian Gulf due to insurance or owner concerns.