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A recent string of back-and-forth attacks between the U.S. and Iran have elevated tensions throughout the Strait of Hormuz and sent oil prices back to triple digits.<\/p>\n
Iran<\/a>‘s Islamic Revolutionary Guard Corps (IRGC) said it hit 10 vessels near the strait on Wednesday, retaliating after American forces sank five of its oil tankers. It is the largest round of shipping strikes<\/a> either country has claimed in the six months since fighting began.<\/p>\n More from WWD<\/p>\n The U.S. military’s Central Command said its attacks were a response to the IRGC targeting a U.S. Navy warship twice with ballistic missiles over the previous two days. The vessel reportedly evaded both strikes and has remained on patrol with no injuries to any personnel.<\/p>\n Brent crude futures prices escalated above $100 per barrel for the first time since July on the news as concerns reman over further disruption to global oil supplies. An estimated 20 percent of the world’s crude oil and liquefied natural gas supply flowed through the Strait of Hormuz<\/a> prior to the start of the Iran war in late February.<\/p>\n As of noon Wednesday, brent crude futures were $101.34 per barrel, the most expensive a barrel has been since surpassing $103 on May 22.<\/p>\n According to data from commodity intelligence provider Kpler, six \u200b vessels passed through the Strait of Hormuz on Tuesday, down from \u200cnine a day earlier and below the 10-day average of about 12. Of the ships passing, five were entering and one was \u200bexiting.<\/p>\n The figures exclude any vessels that might have crossed the waterway with their Automatic Identification System (AIS) transponders turned \u200boff to avoid detection.<\/p>\n Prior to the war in Iran, the conduit typically handled about 130 ships per day.<\/p>\n The trading of strikes between the U.S. and Iran prompted UN secretary-general Antonio Guterres to say he is “deeply concerned” by the situation at the strait.<\/p>\n Guterres’ comments followed a Tuesday report from the UN Conference on Trade and Development (UNCTAD), which indicated that smaller-to-medium-sized businesses are expecting disproportionate pressure from the disruptions in the strait.<\/p>\n “Trade disruptions affect businesses of all sizes, but their capacity to absorb shocks varies,” said the report. “Larger companies can often spread risks across suppliers, markets and sources of finance. Smaller firms, by contrast, typically have fewer alternatives when energy, transport and financing costs rise.”<\/p>\n In the wake of the ongoing constricted traffic at the strait, a group of 18 shipping countries shared their concerns about supply chain chokepoints Tuesday.<\/p>\n The Consultative Shipping Group, an informal cooperation of maritime powers like the U.K., Germany, Japan, South Korea, Canada and Singapore, among others, said the ongoing bottlenecks across global shipping were “not episodic shocks; they are signals of a structural shift in the operating environment of global trade.”<\/p>\n The CGS pointed to recent events including the Covid-19 pandemic, the war in Ukraine, the drought in the Panama Canal<\/a> and this year’s conflict in the Middle East as examples of the ongoing disruptions that have put the industry under stain.<\/p>\n The alliance doesn’t typically issue public statements.<\/p>\n In their note, the countries stressed that while “global shipping works best when rules are clear and consistent around the world,” two parallel trade systems are emerging as more vessels circumvent sanctions, take part in unregulated “shadow” fleets and operate outside of insurance frameworks.<\/p>\n The CGS called on trading partners to consistently enforce and uphold international laws and standards like the United Nations Convention on the Law of the Sea (UNCLOS)<\/a>.<\/p>\n “Defending freedom of navigation therefore requires a focused and coordinated response grounded in globally recognized rules,” the CGS said. “It is essential that trading partners work together to maintain network resilience, manage risks consistently, and prevent fragmentation from becoming embedded in global shipping networks when international trade rules are not functioning as intended.”<\/p>\n