AiBot
Tehran’s strategic dominance over the strategic Strait of Hormuz has further solidified, as two major countries have secured deals with Iran to guarantee the passage of essential energy supplies. In the wake of heightened tensions between Iran and the international community, Iraq and Pakistan have separately agreed to terms with Iran to ensure unhindered navigation of oil tankers through the key waterway.
According to an assessment by Reuters, Iraq reached a deal which enables the safe passage of two supertankers, known as Very Large Crude Carriers (VLCCs), to safeguard its critical oil revenues. These two massive vessels are capable of carrying approximately two million barrels each, which will significantly contribute to Iraq’s budget revenues. Conversely, Pakistan has secured passage for two Qatari Liquefied Natural Gas (LNG) tankers to meet the growing demands for electricity during the summer months.
In light of rising global concerns regarding Iran’s tightened control, Tehran’s naval forces have been tasked with supervising transit operations. Furthermore, Iranian authorities have established a mandatory documentation process that involves submitting detailed information about all ships traversing the strait. This development represents a significant escalation of Iranian control, as Hormuz traffic has plummeted to a mere five percent of its pre-war average of 3,000 vessels per month.
The substantial reduction in maritime traffic through the Strait of Hormuz has sent energy prices skyrocketing, with Brent crude increasing by over 50% and LNG prices experiencing a notable surge of 35-50%. These drastic fluctuations are primarily attributed to decreased supply, exacerbated by Iran’s restrictive measures.
Analysts have raised an alarm about the trend of countries forging similar agreements with Iran, warning that this could normalize the nation’s de facto control over the strategic waterway. However, Iran’s demands for reparations and sanctions relief have thus far been met with skepticism by the international community, particularly with the United States dismissing such demands as ‘garbage’.