Strait of Hormuz: Can Fragile Peace Keep Global Shipping Safe?

**Tim Elliott** (0:00)
This is the Morning Drive, it is Mira Business FM, Strait of Hormuz now. The ceasefire has eased tensions between the US and Iran, but uncertainty over the next round or rounds of peace talks towards peace talks means that risks remain in the strait. So how safe is one of the world's busiest shipping routes today?
Here to discuss the latest maritime security situation, vessel traffic and what it means for global trade and businesses. Chris Long is head of intelligence and compliance at Neptune P2P Group, which is a global security, a risk manager, risk solutions company. Chris, good to have you in the studio.

**Christopher Long** (0:43)
Hi, nice to meet you.

**Tim Elliott** (0:45)
We were online before.
Look, headlines suggest shipping is stabilizing. Following the announcement on June the 27th, there's this kind of widened route. Is the strait actually re-opening or is it a tactical pause in a much larger conflict? Where are we?

**Christopher Long** (1:07)
We're in this situation where there's a lot of uncertainty at the moment.
We've seen a lot of shipping going out of the Gulf in the last week, particularly using two different routes. Iran is a broker in a northern route close to their shore, which requires ships to coordinate that with them. There's also the southern route, which the International Maritime Organization are pushing. It's a southern route very close to the tip of Musandam in Oman, and we've seen quite a lot of ships going through there. Last week, there was a 25% uptake in ships going out of the Gulf after the announcements of the ceasefire, the MOU signing. And then, as you probably know, Iran responded with a couple of attacks on vessels in that southern route, and there's been a pause at the moment on that route particularly. Although I've been watching marine traffic over the last three days, and there's still ships going in and out on southern and northern routes within the Gulf. The central route, the traditional route in Iran alluded to the laying mines in that area. So at the moment, that's an area ships are avoiding. But generally, they can still go in and out if they're willing to take a risk.

**Tim Elliott** (2:27)
How would you, if somebody said to you, so how secure are things, how would you describe the security situation in the Strait of Hormuz at the moment?

**Christopher Long** (2:37)
I'd say it's tenuous.
I think we're at this situation where Iran still wants to maintain control of the strait.
And to do that, it's got to do something kinetic. If ships are going to go through and they are not going to contact the Iranians, then they have to do something about that to retain control. This is exactly what happened two days ago. You know, these sort of ships were getting out, if you like, through the southern route. They had to re-assert their authority and to do that, they hit two ships with drones. And that really did put a stop to ships going through that route for a day or so. You know, the big companies are all sitting back and waiting to see how things develop with the ceasefire situation.

**Tim Elliott** (3:26)
For sure. I mean, how much of a meaningful difference has the ceasefire made? And this kind of, it's a path to peace, we hope.
How much of a meaningful difference has that made to commercial shipping?

**Christopher Long** (3:42)
I think there's a far less threat to commercial shipping at the moment. Certainly those that are working within the Arabian Gulf, you know, prior to the ceasefire, we saw ships attacked all over the region. But at the moment, it seems to be focused, or the Iranians' focus is on the Strait of Hormuz. They're not attacking vessels at anchor, let's say, off Dubai or Shazia.
And that seems to, you know, the threat's lessened, for sure, to ships. It's just the Strait of Hormuz control, and that's what it's all about at the moment.

**Tim Elliott** (4:16)
Okay.
There's uncertainty surrounding the next round of U.S.-Iran talks, of course, as you would expect. But how, as a shipping company, how do you assess the risk? What are the stages, the processes there?

**Christopher Long** (4:36)
Well, you're probably aware that the Iranian Northern Route and their control of that route goes against all international law. The Strait should be a two-way route for ships to get in and out. At the moment, they're stopping that illegally on all the international observations. That's not legal. But I think the major shipping companies are sitting back still waiting to see what happens with the ceasefire.
There's a lot of shipping companies that will take a risk. As long as insurance companies will cover them, then they're willing to take that risk, I think. But yeah, I think we're in this phase of let's wait and see what happens in the next week or so.