Iran’s new Hormuz shipping rules fuel uncertainty, analyst says

[0:00] Now, Iranian news agencies have published a map of the Strait of Hummels [0:03] suggesting the Revolutionary Guard may have placed naval mines in the vital waterway. [0:09] The circle on the map you see here is labelled Area of Danger. [0:13] The IRGC Navy says ships must coordinate with them to avoid naval mines. [0:20] Tankers that used to pass close to Oman, which is south of the Strait, [0:26] are now being told to take a more northerly route closer to the Iranian coast. [0:31] Those shipping routes pass either side of Larak Island. [0:35] That heavily guarded island is reportedly being used by the IRGC to monitor ship traffic. [0:40] Well, let's speak to C. Uday Bakshar about this. [0:44] He's a maritime security specialist and director of the Society for Policy Studies. [0:47] That's an independent think tank based in New Delhi. [0:50] Thank you so much for your time. [0:52] So what is your understanding, before we talk about this new route, [0:54] what is your understanding first of the status at this moment of the Strait of Hummels? [0:59] Is it fully open, partially open? Are ships being allowed? [1:02] The current situation in the Strait of Hummels is very, very uneasy. [1:11] There is a lot of uncertainty about what Iran is trying to impose as the new regulations. [1:20] And this is reflected really in the anxiety in the market, [1:23] meaning that from the time the ceasefire was announced, [1:28] the number of ships that have transited is a handful, [1:34] at best about three to five, [1:37] a Liberian flag, a Greek flag, a Chinese flag. [1:41] And this, where the normal traffic in the Hormuz is between 130 to 140 ships. [1:46] Primarily because nobody knows. [1:50] I think there will be a little more clarity after the talks in Islamabad tomorrow, [1:54] Friday, on the 10th of April, about the new route that Iran is proposing. [2:00] I have seen reports from the ground that the IRGC and other representatives of the Iranian military [2:07] on the ground in that part of the world between Laraq and the Hormuz island, [2:12] which you can see on the map, are charging anything up to $2 million, [2:18] which seems to be ad hoc, per ship. [2:20] So uncertainty, anxiety, we have to wait till tomorrow. [2:25] Quite a lot of uncertainty, as you say. [2:27] So only a handful of ships, from what you understand, [2:30] have passed the Strait since the ceasefire was announced. [2:34] You know, by saying that ships must coordinate to avoid contact with possible mines, [2:40] what do you think is happening here? [2:41] Is this real, the threat of mines, or is this maybe a way for Iran to charge, as you say, these fees? [2:49] If I was the owner of a VLCC, which means about 300,000 tons, [2:57] whose value could be a quarter billion dollars, between $250,000 to $300,000, [3:03] I would believe the Iranians if they said that we had laid mines [3:08] to prevent a U.S. assault, an amphibious assault. [3:13] So my short response is, the Iranian caution about mines would be taken very seriously by merchant ships. [3:25] Okay. [3:25] Now, by forcing the tankers from the traditional southern routes closer to Oman in the UAE [3:31] to a northern route closer to Iran's coast, [3:34] this is, you know, interesting. [3:36] What do you think are the navigational risks and the strategic implications of this route change [3:44] for the ships that travel through the Strait of Hormuz? [3:48] You know, prior to the 28th of February, Epic Fury, [3:52] both Iran and Oman had a joint responsibility for this critical strait, the Hormuz. [3:59] And ships would pass, enter, exit, and this was a very satisfactory arrangement. [4:06] Both countries could claim a certain degree of sovereignty in their territorial waters, [4:13] which is 12 nautical miles. [4:15] But otherwise, the rest of the waterway was deemed to be international. [4:20] And to that extent, Iran and Oman were being sherpas for global traffic. [4:28] Now, Iran is imposing new conditions, which Oman has not yet accepted. [4:33] The latest reports I saw this morning, [4:35] preparatory to the talks on Islamabad tomorrow, [4:38] Oman has said that they do not subscribe to the Iranian proposal to impose a toll. [4:46] Yes, Iran can impose a toll for specific services. [4:49] It's worthy to say that we need to clear the mines. [4:54] So, therefore, we need money. That's different. [4:56] But it cannot be an open system. [5:00] Mr. Bakshar, can I ask you about the risks here from a maritime safety perspective? [5:06] What are the risks of rerouting all the tanker traffic to one side of the strait? [5:12] And what are the economic implications also of this? [5:15] I don't think the traffic would be routed totally along Ladakh. [5:21] My understanding is that there would be two routes, two routes. [5:25] One, the entry into the Persian Gulf. [5:27] The other is the exit. [5:29] Iran is trying to control the ships that would be transiting Ladakh. [5:35] So, to that extent, if Iran takes the responsibility for clearing the mines [5:39] or alerting shipping about mines and where they were laid, [5:44] I think there would not be a problem. [5:47] But it is for Iran to establish the credibility of maritime safety. [5:51] And this is not new. [5:53] If you recall the Iran-Iraq war of the 80s, at that time also, the waters were mined. [6:00] And later on, they were clearly identified and merchant ships ensured that they made safe passage [6:07] by avoiding the areas that were deemed to be hazardous. [6:11] Thank you so much for your insight. [6:14] Thank you for explaining this so well to us. [6:16] Sude Bakshar, maritime security specialist, joining us from New Delhi. [6:22] Thank you.