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Iran’s seizure of 2 Greek oil tankers adds risk to key shipping route

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Iran’s seizure of two Greek oil tankers in the Persian Gulf increases the risk of further disruptions in transportation in a region that is a vital source of global energy supply.

On Friday, the Islamic Revolutionary Guard Corps hijacked two Greek tanks, each loaded with about 1 million barrels of oil, in Iranian territorial waters - an apparent eye for a ship that the European country confiscated.

Greece is the largest oil-owning nation in the world, making any dispute with Iran potentially serious for the global market. Also, about one-fifth of the daily supply of crude oil passes through the Strait of Hormuz, the narrow waterway that separates the Persian Gulf from the Indian Ocean and crude oil buyers around the world.

US seizes Iranian oil cargo from Russian-operated ship near Greece: sources

“Shippers will need to be more vigilant,” said Matt Stanley, a trader and broker at Dubai’s Starfuels. “Iran will be extremely protective of all goods.”

Greece has warned all ships in the country to “adjust to the unacceptable situation” when sailing in the Persian Gulf. About 27% of the global oil fleet is owned by Greece, according to Clarkson Research Services Ltd., a unit of the world’s largest shipping broker.

Brent crude rose 0.5 percent on Monday to about $ 120 a barrel after gaining 1.7 percent on Friday, according to ICE Futures Europe.

Greek movement

The seized tanks, Prudent Warrior and Delta Poseidon, were seized by Iranian forces in the Persian Gulf on Friday, according to the US 5th Fleet in Bahrain. Both are also detained under the Greek flag and have been loaded into Iraq, according to Bloomberg’s tank tracking data.

The hijacking took place shortly after Greek authorities stopped a tanker under the Iranian flag and, in coordination with US authorities trying to impose sanctions on the Islamic Republic, confiscated its cargo.

The Trump administration has re-imposed widespread sanctions on Iran’s energy economy and industry after it stepped out of the 2015 nuclear deal as part of a broader strategy to destabilize and weaken the country’s leadership.

Prudent Warrior has since been taken to the Iranian port of Bandar Abbas with all his crew and cargo still on board, said George Vakirtzis, general manager of the ship’s owner, Polembro Shipping Ltd.

Previous incidents

The Persian Gulf nation has been holding a British oil tanker for more than two months in 2019, after an Iranian oil tanker was stranded in Gibraltar. Both ships were eventually released. Other British, Saudi and UAE tanks have been attacked in and around the city of Hormuz in recent years, while Iranian ships have been hit in the Red Sea.

“I knew the Iranians would retaliate, I saw that two years ago with the Stena,” Vakirtzis said. “A lot of Greek ships go up and down the Gulf right in front of their door.” The captain of a loaded tanker could do nothing to prevent a group of helicopter-carrying embarkations like the one that captured the Prudent Warrior, Vakirtzis added.

The IRGC said it was responsible for the capture and warned other Greek ships in the area, according to the semi-official news agency Tasnim. The IRGC has indicated that 17 other Greek ships in the Gulf could be confiscated, said Tasnim, which is closely aligned with the Iranian military organization.

- With the assistance of Serene Cheong, Prejula Prem, Verity Ratcliffe, Golnar Motevalli, Paul Tugwell, Sotiris Nikas and Arsalan Shahla.

Photo: The Iranian flag is set for a photo in New York, USA, Wednesday, February 19, 2014. Photo credit: Scott Eells / Bloomberg

Copyright 2022 Bloomberg.

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