Experts say the seizure of an oil tanker near Iran could raise insurance rates for shipping companies and eventually reduce tanker traffic.
July 20, 2019
On Friday, Iran seized a British-flagged oil tanker in the narrow passageway that carries one-fifth of the world’s crude exports and a second Liberian-flagged ship was briefly detained. Britain’s foreign minister promised a “considered but robust” response. Richard Nephew, a Columbia University researcher who wrote a book on sanctions, agreed that the tanker seizure and a pair of minor but mysterious attacks on tankers that preceded it — and for which Iran denied responsibility — could create “a real risk premium” for companies that operate in the Gulf and insurers that underwrite them.
Friday’s seizure was retaliation for the July 4 seizure for alleged sanctions-busting of an Iranian tanker by Gibraltar, a British territory. It marks a sharp escalation of regional tension triggered by the Trump administration when it withdrew from a 2015 nuclear deal with Iran and imposed severe restrictions on Iranian oil exports and other sanctions.
Goldstein said the fact that oil prices haven’t risen more reflects an overly calm attitude in a market that feels it “doesn’t know what’s happening and ... will play it very close to the vest day to day. There is very little forward planning going on.”
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