Israel launched wide-scale strikes against Iran this morning, targeting nuclear facilities, ballistic missile factories and military commanders, stating that the operation will continue “as long as necessary”. Immediately thereafter, Iran vowed “severe punishment for Israel” and has sent more than 100 drones to attack Israel.

The UKMTO advised that there is presently no evidence of commercial shipping being targeted by Iran. However, the British security office also warned of the potential for a rapid escalation in tensions, adding that there is a risk of the Houthis from Yemen – Iran’s allies – broadening their targeting in the region.

Global oil prices have surged today as markets begin to factor in the risk of key waterways coming under threat.

Vanguard, a maritime security consultancy, stated that although there is no increased maritime threat towards commercial shipping, tensions in the Strait of Hormuz and Gulf of Oman remain at heightened alert due to increased military activity, air defence operations, and possible GNSS interference.

Jefferies’ data shows overall the Middle East market represents 40% of total crude oil trade, 33% for LPG, 23% for LNG, 12% for refined products, 5% for containers, and 3% for dry bulk.

SEB, a Swedish bank, said today’s fighting was positive short-term for tankers, with long-term impacts likely more negative with demand disruptions from higher oil prices likely to have a negative longer-term impact.

Similarly, for LNG and LPG, SEB said short-term there would be a positive impact on rates, noting risk to volumes and demand in the case of disruptions to the Strait of Hormuz.

Lars Jensen, who has been covering the Red Sea shipping crisis from day one over the past 18 months, noted via LinkedIn the risks of a partial closure of the Strait of Hormuz, could see oil prices increasing further, and leading to global container lines avoiding the region, in turn, choosing to tranship boxes outside of the Middle East, heightening the risk of wider Asian ports congestion.

“Iran is not adverse to interfering with commercial shipping, as for example seen in their seizure of 14,000 teu MSC Aries last year. The vessel is still held by Iran,” Jensen added.