Ship Attacked in Hormuz; Quake Devastates Venezuela

An attack on a ship in the Strait of Hormuz points to risk to Middle East shipping even with an interim peace deal in effect. President Trump says the deal is still intact and the strait is open.

Nathan Hager

Stuart Livingston Wallace

The ship was traveling in the southern corridor hugging the coast of Oman, an alternative to the northern passage near Iran. This may be a warning to use the Iranian-controlled route, suggesting Iran wants to maintain control over Hormuz and extract a revenue stream (toll/fee) from all ships, worth billions annually.

Details are not entirely clear; no one has claimed responsibility. The red line for the US and allies is that the strait must remain an area of free passage for international commerce.

Could the status of the Strait of Hormuz bog down the 60-day negotiations toward a more permanent deal?

Nathan Hager

Stuart Livingston Wallace

It will be a problem going forward, probably the most pressing due to immediate global economic impact. Despite the recent drop in oil prices, we are a long way from normal in global energy supply. Few believe a deal will be done in 60 days; the JCPOA took nearly two years. Expectation is for an extension.

Beyond Hormuz, there are huge problems: nuclear file, ballistic missiles, sanctions, frozen assets, support for proxies. It's a very long list of thorny issues.

How is the attack affecting traffic through the Strait of Hormuz? President Trump said 19 million barrels of oil went through in one day.

Nathan Hager

Stuart Livingston Wallace

It's difficult to say definitively because many ships turn off signals. However, the fact that attacks can still happen makes the shipping industry very cautious. The International Maritime Organization suspended an evacuation plan for hundreds of ships stuck inside the Persian Gulf because safety cannot be guaranteed.

The Sultan of Oman is going to France next week, and Hormuz will be high on the agenda. The Omani position is critical as one of the two countries on the strait.

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