Hundreds of other vessels remained outside Hormuz unable to reach ports, shipping data showed

International News via Reuters:

The U.S.–Iran war widened on Wednesday after a U.S. strike hit an Iranian warship off Sri Lanka, deepening a crisis that has paralysed shipping through the Strait of Hormuz for a fifth day and choked off vital Middle East oil and gas flows.

The U.S. submarine strike on the Iranian vessel came as U.S. President Donald Trump pledged to provide insurance and navy escorts to ships exporting oil and gas from the Middle East in a bid to contain soaring energy prices.

At least 200 ships, including oil and liquefied natural gas tankers as well as cargo ships, remained at anchor in open waters off the coast of major Gulf producers including Iraq, Saudi Arabia and Qatar, according to Reuters estimates based on ship-tracking data from the MarineTraffic platform. 

Hundreds of other vessels remained outside Hormuz unable to reach ports, shipping data showed. The waterway is a key artery for around a fifth of the world’s oil and LNG supply.

At least eight vessels have suffered have been hit in the area since the Iran conflict began on Saturday. On Wednesday, the Maltese-flagged container ship Safeen Prestige was damaged by a projectile as it sailed toward the northern end of the Strait of Hormuz, prompting the crew to abandon ship, British navy agency UKMTO said. 

Marshall Islands crude oil tanker Libra Trader and Panama-flagged bulker Gold Oak also sustained minor damage some 7-10 nautical miles off the United Arab Emirates port of Fujairah early on Wednesday, UKMTO said later.

The Libra Trader experienced a loud blast and debris from an unknown projectile, while the Gold Oak was struck by a projectile, though neither vessel sustained major damage or crew injuries, the agency added.

Qatar will fully shut down gas liquefaction on Wednesday and won’t return to normal production and exports for at least a month, two sources familiar with the matter told Reuters. Gas giant QatarEnergy declared force majeure on shipments of LNG after attacks on its production facilities.

Iraq cut its oil production as the country ran out of storage, unable to load it on tankers. Saudi Arabia, the UAE and Kuwait were also struggling to load oil but it was not yet clear if they cut output.

RARE TANKER TRANSIT AMID SHIPPING FREEZE

Despite the gridlock, a rare voyage took place on Tuesday when the Suezmax tanker Pola sailed through the Strait of Hormuz to the UAE to load crude, according to industry sources and LSEG ship-tracking data.

The Pola had switched off its AIS transponder late on March 2 as it approached the Strait and reappeared the next day off Abu Dhabi.

Trump on Tuesday said he had instructed the U.S. International Development Finance Corporation to provide political-risk insurance and financial guarantees for maritime trade in the Gulf.

“No matter what, the United States will ensure the free flow of energy to the world,” he wrote in a social media post.

Commercial war risk insurance costs have soared at least five-fold in recent days.

“Rates have increased from levels that owners and charterers will be used to,” said Angus Blayney with insurance broker Gallagher.

“The cost will vary depending on the vessel type, cargo and routing, however marine insurers are very much continuing to provide cover.”

Oil prices dipped on Wednesday, but were up 12% since the war started on Saturday, as U.S.-Israeli strikes on Iran disrupted Middle East supplies.

On Wednesday, Goldman Sachs raised its forecast for Brent crude oil in the second quarter by $10 to $76 per barrel. It also raised its prediction for WTI by $9 to $71 per barrel. 

The bank said it sees longer-than-expected disruption to exports of oil and gas through the Strait of Hormuz and damage to oil production facilities as risks. It also assumes that low oil flows through Hormuz will lead to large declines in OECD inventories and Middle East production in March. 

“Providing protection for all tankers operating in areas currently threatened by Iran is unrealistic as this would require a very high number of warships and other military assets,” said Jakob Larsen, chief safety and security officer with shipping association BIMCO.

ASIA SCRAMBLES FOR REPLACEMENT BARRELS

Some Asian refiners and petrochemicals companies face output cuts because they are unable to get prompt replacement cargoes from their suppliers in the Gulf due to the shipping standstill. 

India’s Mangalore Refinery and Petrochemicals and Petronet LNG both issued force majeure notices due to the disruptions.

Asia sources 60% of its oil from the Middle East, leaving the region vulnerable to the disruptions. Refiners in Indonesia and Japan are sourcing more oil from the U.S. to replace the shortfall. India will consider buying more from Russia, sources at two companies have said. 

Saudi Aramco’s largest domestic refinery and key crude export terminal Ras Tanura was struck on Wednesday, four sources said.

Reporting by Jonathan Saul; Additional reporting by Renee Maltezou; Writing by Anna Hirtenstein; Editing by Louise Heavens, Aidan Lewis

It was unclear where the missile was headed

International News via Reuters:

Turkey said that NATO air defences destroyed an Iranian ballistic missile headed into Turkish airspace on Wednesday, marking the first time the alliance member has been drawn into the Middle East conflict and raising the possibility of a major expansion involving its bloc allies. 

Turkey – Iran’s neighbour that had sought to mediate U.S.-Iran talks before the air war that began at the weekend – warned “all parties to refrain from actions that would lead to further escalation,” suggesting it was not poised to call upon the trans-Atlantic defence bloc for support. 

But Ankara could potentially invoke NATO’s Article 4 after the airspace breach if it deemed the threat serious enough, a step that could lead to the alliance’s Article 5, which would oblige members to come to its defence. 

It was unclear where the missile was headed. NATO condemned Iran’s targeting of Turkey, which has the bloc’s second-largest military, and said it stood firmly with all allies.

U.S. BASE IN NEIGHBOURING PROVINCE 

The U.S. has air forces stationed at southern Turkey’s Incirlik base, which is located in an area neighbouring Hatay province, where authorities said debris from the intercepting NATO missile had fallen.

Ankara says that Washington has not used Incirlik in its air assault, alongside Israel, on Iran, which triggered Tehran’s missile and drone attacks. 

Iran did not immediately comment on the incident. In a separate call about Iranian missile attacks in Qatar, a close Turkish ally, Iran’s Araqchi told his Qatari counterpart that the missiles targeted only U.S. interests, and not Qatar. 

The Turkish defence ministry said the missile had passed over Iraq and Syria before it was downed by NATO air and missile defence systems stationed in the eastern Mediterranean Sea, adding there were no casualties in the incident. 

“All necessary steps to defend our territory and airspace will be taken… (and) we reserve the right to respond to any hostile actions,” the ministry said, adding: “We will continue to consult with NATO and our other allies.”

Statements by senior Turkish officials did not mention Article 4 and Ankara did not comment when asked by Reuters. 

The article states that NATO allies will “consult together whenever, in the opinion of any of them, the territorial integrity, political independence or security” of a member is threatened. 

U.S. Defense Secretary Pete Hegseth said there was no sense that the incident would trigger Article 5, which has only been invoked once before, after the September 11, 2001 attacks, and which would mark a major escalation in the conflict. 

ANKARA PROTESTS TO TEHRAN

Turkish Foreign Minister Hakan Fidan conveyed a protest to Iranian counterpart Abbas Araqchi in a call after the incident, a Turkish diplomatic source said.

Several countries in the Gulf and elsewhere – including as far west as EU member Cyprus, where a British air base was hit by a drone – have been caught in the fallout.

Ankara had sought to mediate between the sides in the weeks before the conflict erupted. 

Reporting by Tuvan Gumrukcu; Additional reporting by Daren Butler; Writing by Jonathan Spicer; Editing by Aidan Lewis