US report: Attacks on oil tankers in and around the Red Sea likely to escalate

An American report suggested that attacks on oil shipping in and around the Red Sea region are likely to escalate, threatening a significant rise in oil prices. It noted that the attack on the Greek tanker Sunion and another ship that has not yet been named reflects the measures taken by naval elements of the Iranian Islamic Revolutionary Guard Corps that preceded the attacks of October 7, 2023.

The American website oilprice , which specializes in energy affairs, quoted a source in the European Union as saying: “The series of intensive military exchanges between the Iranian-backed Hezbollah organization and Israel at the beginning of the week is consistent with Iran’s intention to continue pressuring Israel and its main Western allies through various indirect mechanisms rather than direct action by Iran.”

“The incidents on Sunday [August 25] involving Hezbollah and the previous weeks involving the Houthis’ escalation of attacks in the Red Sea point to the main way Iran intends to respond to the recent Israeli attacks on it and its proxies,” he explained.

He added: "Using Hezbollah and the Houthis to carry out such strikes puts distance between Iran and Israel so as not to directly provoke Israel's main sponsor, the United States."

The report stated that in early May 2023, the Strait of Hormuz and its surroundings witnessed the seizure of two oil tankers by Iranian forces within a week, although the tankers "Newe" and "La Advantage Sweet" had no direct connection to Israel.

Iran still controls a key transit route through which about 30 percent of the world’s oil passes, an EU source said. As a result of these two seizures, oil prices and shipping insurance have risen, albeit temporarily, as they did after the Houthis hijacked the Galaxy Leader on November 19, 2023.

However, it was interesting to note, according to the report, that even at that time the rise in oil prices was limited, despite the Houthi spokesman’s threats at the time that the group intended to “sink” Israeli ships in the Red Sea. Thus, he concluded, the same could be said of the August 21, 2024 attacks on shipping.

According to the site, this is partly due to the area being avoided by many major oil companies who have decided to use the longer Cape of Good Hope route instead. It can also be attributed in part to increased security in the region’s waters by the United States and its allies towards the end of last year in the form of “Operation Prosperity Sentinel.”

This multilateral naval task force is specifically designed to protect against such future Iranian or Houthi attacks on oil shipping in the Red Sea region.

The International Monetary Fund's PortWatch data shows that the average number of ships transiting the Bab el-Mandeb Strait daily on the Red Sea route was 23 in the week ending August 11, 2024, compared to 70 on the same day last year.

In addition, the report noted that China’s efforts to de-escalate the ongoing escalation of attacks in the region were either directly from Iran or its Houthi proxies. It added that Beijing, in the wake of the “25-year comprehensive cooperation agreement between Iran and China,” exerts enormous influence over Tehran.

Through this deal and others like it in the region, China gains control over the Bab el-Mandeb Strait, through which crude oil is shipped up the Red Sea toward the Suez Canal before moving to the Mediterranean and then west.

The American website pointed out that Iran may believe that further escalation by its proxies is the best way to respond to the recent series of Israeli attacks on it, regardless of pressure from China. It said that supporting Hezbollah to launch larger attacks against Israel would be one such way to do so, as would what it described as increased aggression led by the Houthis against Western shipping in and around the Red Sea.

Another way, the report went on to say, is for the Houthis to launch attacks on key oil facilities in Saudi Arabia. The last time the Houthis launched major coordinated attacks on Saudi Arabia — on September 14, 2019, against the Abqaiq oil processing facility and the Khurais oil field — Saudi oil production was cut in half, causing the biggest jump in the US dollar since 1988.