Commercial ships continue to pass through the Strait of Hormuz near the port of Bandar Abbas, Iran, despite the sinking of a Singapore-flagged container ship last week. Maritime experts believe that strong demand for Middle Eastern energy and profitable shipping opportunities are encouraging some operators to continue their activities in this dangerous region.
Analysis of Recent Incidents
Two Singapore-flagged container ships named GFS Pride and GFS Giselle were attacked this week. GFS Pride sank due to a collision and fire, while GFS Giselle was damaged. Fortunately, the crew members of both ships are safe. However, these incidents have raised concerns about the security of commercial shipping in one of the world's most important maritime chokepoints.
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According to maritime reports, the number of ships passing through the Strait of Hormuz in the week ending October 14 decreased to 131, down from 176 the previous week. However, this decline cannot be solely attributed to recent incidents.
Continued Demand for Energy
Dimitris Ampatzidis, marine risk manager at Kpler, stated that these attacks demonstrate Iran's ability to threaten commercial ships and that risks extend beyond oil and gas transportation. However, strong demand for oil, especially from Asia, motivates tanker operators to continue transporting energy from the Persian Gulf. Some operators may even accept the risk despite incurring higher costs.
Singapore's Foreign Minister, Vivian Balakrishnan, provided an example of this at the Milken Institute Asia Summit, stating that a Gulf counterpart told him that his country has earned more from oil exports since the war began. This country has effectively insured itself against attacks using around 20 very large crude carriers.
Future Predictions for Ship Transits
Despite the risks, ships continue to pass through the Strait of Hormuz, indicating the commercial importance of this route, especially for sending energy to Asian markets. However, more attacks could deter more operators from transiting this strait. The impact depends on the type of ship and each company's risk assessment.
The Singapore Shipping Association has also downplayed the likelihood of a mass exit of commercial ships from the region, stating that operators will continue to adapt to the new business conditions instead. T.S. Teo, the head of the association, said, "These developments are more likely to lead to a reconfiguration of trade patterns rather than a mass exodus from the region."
While some operators remain willing to pass through the Strait of Hormuz, most of the global container shipping industry has adjusted their networks to avoid this strait. Jindra Krishna, a director at Drewry Maritime Advisors, announced that none of the major container shipping lines have resumed their services yet.
Ultimately, if activities in the Gulf of Oman escalate, it could pose a more serious threat to regional supply chains, especially if attacks damage alternative ports such as Khor Fakkan in the UAE and Sohar in Oman.
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