Iran's escalation over tanker seizures raises risk in key oil shipping route

Iran's aggressive response to international calls demanding it immediately release two Greek-flagged vessels the Islamic Revolutionary Guard Corps (IRGC) seized last week have raised alarm about the safety of key oil shipping routes.

The IRGC on Friday (May 27) seized two oil tankers in the Arabian Gulf, sparking swift rebuke from Greece, the world's largest tanker-owning nation, and others, including the United States and European Union.

Athens said Iranian navy helicopters had landed gunmen on the two tankers -- the Prudent Warrior, operated by Polembros Shipping, a family-owned ship management company based in Athens, and Delta Poseidon.

Delta Poseidon had been travelling in international waters when it was seized.

Each were carrying about one million barrels of oil, and had loaded their cargo in Iraq, Bloomberg reported.

The Prudent Warrior was taken to the Iranian port of Bandar Abbas, it said.

In a Monday announcement on its website, Polembros Shipping said Prudent Warrior "remains detained in Iranian territorial waters".

The shipping company said the vessel's master and members of crew had "managed to communicate with Polembros", adding that it remains "in constant co-operation and communication with concerned parties and authorities".

Nine Greeks are among the crew members, the Greek foreign ministry said, without specifying the number of other sailors on board.

Iran's Ports and Maritime Organisation said the crews of the two vessels had not been "detained" and were in fact being "protected" by Iran, The Maritime Executive magazine reported Monday.

'Acts of piracy'

Greece condemned Tehran's detention of the two ships as "tantamount to acts of piracy" and warned its citizens not to travel to Iran.

It warned its ships to avoid Iranian waters, but stopped short of ordering them not to sail into the Gulf.

US Secretary of State Antony Blinken on Sunday condemned the seizure "in the strongest terms" and called for the immediate release of the vessels, their cargoes and their crews, the State Department said in a statement.

State Department spokesman Ned Price denounced Iran's "continued harassment of vessels and interference with navigational rights and freedoms".

This poses a threat "to maritime security and the global economy", he said.

The German and French foreign ministries condemned the seizure as a severe and unjustifiable violation of international law, and called on Iran to immediately release the ships and their crews.

But Iran on Wednesday remained recalcitrant, accusing Germany and France of "inappropriate interference" following their condemnation of the incident.

The IRGC had previously issued a further threat to Greece, saying "other Greek tankers were in the Gulf waters, which could be seized by the elite force", The Maritime Executive reported Monday.

"The escalation in the rhetoric is raising renewed concerns for shipping and specifically the world oil market which is already under pressure due to Russia's invasion of Ukraine," the magazine said.

"Any Greek owner is going to think twice before going into the Middle East," Richard Matthews, head of research at E.A. Gibson Shipbrokers told the Financial Times, noting the potential for additional disruptions in crude oil shipments.

Iran's seizure of the two ships "raises the risk of further interruptions to shipments from a region that's a vital source of global energy supplies", Bloomberg reported Monday.

"Shippers will need to be more vigilant," Matt Stanley, a trader and broker with Starfuels in Dubai, told Bloomberg.