Iranian regime’s aggression raises shipping costs

Tanker ship on fire in ocean (© ISNA/AFP/Getty Images)
The Iranian regime is responsible for several recent attacks on oil tankers in the Persian Gulf, such as this Norwegian-owned one attacked June 13. (© ISNA/AFP/Getty Images)

The Iran regime’s attacks on oil tankers in the Persian Gulf are driving up shipping costs and endangering lives while demonstrating the regime’s use of violence and extortion to seek leverage in the international community.

In a recent tweet, Secretary of State Mike Pompeo condemned Iran’s Islamic Revolutionary Guard Corps (IRGC) for its attempt to harass a British vessel near the Strait of Hormuz and said the U.S. will work with allies to ensure maritime security and global commerce.

U.S. Special Representative for Iran Brian Hook told reporters that attacks on several tankers near the Strait of Hormuz in the Gulf show the Iranian regime continuing its aggression at the expense of international trade.

Brian Hook in chair, gesturing (© Nicolas Garriga/AP Images)
Brian Hook, the U.S. special representative for Iran (© Nicolas Garriga/AP Images)

“We know that maritime insurance rates have gone up because of Iran’s maritime attacks,” Hook told reporters during a June 28 news conference in London. “Iran, for its 40-year history, thrives on terrorizing people, and it often works and they escalate tensions until there is a relaxation of pressure.”

Bloomberg reported June 24 that the combined cost of insuring tankers and cargo in the region has increased tenfold to nearly $500,000. The cost of insuring a $75 million vessel, the report said, spiked from $30,000 early this year to more than $200,000.

The United States is using sanctions to pressure the regime to permanently scrap its nuclear weapons program and halt its terrorist financing.

On July 11, the British Royal Navy said it had prevented Iranian gunboats from impeding an oil tanker in the Gulf. Iran’s Islamic Revolutionary Guard Corps denied involvement. (The United States designated IRGC as a foreign terrorist organization in April.)

U.S. officials say the regime or its proxies are responsible for attacks on four oil tankers May 12 and on two more June 13. While the regime has denied responsibility for those tanker attacks, it acknowledges bypassing limits on stockpiling and enriching nuclear material in violation of its past pledges.

Meanwhile, shipping industry officials warn of rising costs.

The Baltic and International Maritime Council (BIMCO), a shipping industry association, said in a June 21 statement that freight rates for shipping 2 million barrels of oil from the Persian Gulf to China more than doubled after the June attacks, from $9,979 per day in May to $25,994 per day.

“The added costs of safety measures as well as higher insurance premiums, which rose sharply following the news of the attacks, mean that ship owners will not only face higher risks but also higher costs when trading in the region,” BIMCO says.