Over the last year, the escalating trade war between the US and China has created many headlines, not least in terms of its potential impact on world trade and, therefore, world shipping.
Recently, another aspect of the foreign policy agenda being pursued by President Trump’s administration is likely to cause some degree of discomfort among those in the world of shipping: the withdrawal of the US from the 2015 nuclear accord with Iran and the tensions which have resulted from that decision.
The fall-out between the two nations has prompted Iran to issue threats to close the Strait of Hormuz, one of the most strategic shipping lanes in the world. The threats have come from senior levels of the Iranian administration, including President Rouhani and more recently the Armed Forces Chief of Staff Mohammed Bagheri.
Around one fifth of world oil production passes through the Strait of Hormuz which links the Persian Gulf to the Gulf of Oman. Any action taken by Iran would potentially breach international law and the UN convention on the laws of the sea, particularly as Iran does not have full territorial control of the Strait.
As has been the case with the US-China trade war, the fall out between the US and Iran has seen one threat met with another threat, and as tensions have escalated, the potential for some form of military conflict has grown. The US has also extended its stance on sanctions to countries who continue to buy Iranian oil, so multiple nations are now being impacted by the stand-off between US and Iran.