Oil tankers under attack in Red Sea, Strait of Hormuz and Black Sea

As economic warfare is used as a weapon in increasing conflicts in the Middle East and Europe, oil tankers are increasingly coming under fire on many fronts.

Iran has stepped up attacks on tankers in and around the Strait of Hormuz this month as it seeks to impose its control over the vital oil corridor. Tehran’s Houthi allies in Yemen opened a second front this week, opening fire on two Saudi tankers in the Red Sea after declaring a naval embargo on Riyadh.

Meanwhile, Ukraine announced that it attacked more than 150 tankers, cargo ships and other ships affiliated with Russia’s shadow fleet in the Sea of ​​Azov and the Black Sea. Kyiv Post.

The oil market is currently dealing with wars on multiple fronts, Helima Croft, head of global commodity strategy, told CNBC’s “Power Lunch” on Thursday. Oil prices rose more than 30% in July as the security situation in the southern Red Sea and Hormuz rapidly deteriorated, with Brent crude surpassing $100 a barrel on Thursday for the first time since May.

Ship traffic through Hormuz declined after recovering in the weeks following the June 17 memorandum of understanding signed between the United States and Iran on reopening the strait.

“After the collapse of the memorandum, we have entered the worst phase of this conflict for merchant shipping,” said Dimitris Maniatis, CEO of maritime risk service Marisks, based in Athens, Greece.

“The main reason for this is that the Iranians want to have more authority and control over what happens in the Strait of Hormuz,” Maniatis said. he said.

Approximately 61 merchant ships have been attacked in the Persian Gulf, Strait of Hormuz and Gulf of Oman since March 1; these attacks resulted in the deaths of at least 17 sailors and dozens of injuries. International Maritime Organizationa United Nations agency.

According to IMO data, as the conflicts between the USA and Iran rapidly escalate, at least a dozen tankers were hit and at least two sailors were killed in and around Hormuz this month.

The Red Sea attacks threaten millions of barrels of oil per day, which the Saudis are diverting to the west coast via a pipeline due to the security situation in Hormuz. Saudi Arabia exports in transit through the Bab al-Mandeb Strait, a transit point connecting the Red Sea to the Gulf of Aden.

“Together, the Iranians and the Houthis are now dealing a very serious blow to America’s national interests, American oil companies and, of course, Saudi Arabia,” Maniatis said. “But they fail to prevent exports completely.”

Houthi attacks on ships in the Red Sea from 2023 to 2025 in response to Israel’s war in Gaza significantly reduced traffic in Bab al-Mandeb. Shipping through the Bosphorus had still not fully recovered.

Kpler commodity research director Matt Smith said the Saudis could route some of the oil through a pipeline from a Red Sea port to the Mediterranean via Egypt, but the logistics were complicated.

Supertankers cannot pass through the Suez Canal fully loaded because the canal is too shallow, Smith said. He said the Saudis would have to unload half the cargo at the Ain Sokhna port, transfer it by pipeline to the Sidi Karir port, send the supertanker through Suez and pick up the oil from the other side.

The supertanker would face a much longer journey from around Africa to destinations in Asia and would have to return via the same route via Suez due to Houthi threats in Bab al-Mandeb, Smith said. The round trip will take about eight weeks, he said.

Croft said seaborne oil shipments from the Middle East were increasingly facing a “no way out” scenario due to disruptions in the Red Sea.

Meanwhile, the Caspian Pipeline Consortium in the Black Sea Loading on tankers was stopped In the Russian port of Novorossiysk due to attacks on ships. Kazakhstan exports about 80% of its crude oil through that pipeline, Croft said in a note to clients this week.

Croft said the Kazakhs had limited alternatives to the pipeline, meaning their production of about 1.7 million barrels per day in June could be in danger of being shut down. The Ukrainians also hit Russian refineries, causing more than 50% of the country’s capacity to go offline, the analyst said.

“Russia has imposed an export ban on surplus products and its refineries have been hit hard by Ukraine,” Croft told CNBC. “Russia is one of the biggest exporters of products, one of the biggest exporters of diesel. This is really tightening the product market as well as the crude oil market.”

In his note, Croft stated that the dangerous rise in the Middle East could push Brent oil prices above $128 per barrel, the highest level in 2022 after Russia invaded Ukraine. It was stated that in the worst-case scenario where the region would be dragged into an all-out war, Brent could exceed its peak of 148 dollars per barrel in 2008.