- Iran, has been looking to catalyse an expansion of the direct conflict between Israel and Hamas into a wider war between Islam and the Jewish state of Israel.
- EU source: the Iranian-backed Houthis are not acting against vessels in and around the Red Sea without Beijing’s tacit approval.
- If China did take its foot off the brake with Iran, then the chances of an embargo on oil exports first to Israel and then to its allies would dramatically increase.
The rise in the benchmark Brent oil price from just over US$72 per barrel (pb) to above US$80pb in a week highlights that the risk premium attached to the Israel-Hamas war is still very much in play in the global oil markets. Although other factors played a part in the oil price rise, a significant part of the increase was due to the rising danger posed to tankers moving oil from the Middle East to Europe via the Red Sea. This has long been the shortest and generally cheapest method to move oil via ships from east to west. However, several vessels – supposedly linked in some way to Israel, but some are not at all connected – have been seized by Yemen’s Houthi militants. The group remains overtly backed by Iran and covertly backed by Iran’s own sponsors, most notably in this instance Russia, but also China. Given the crucial importance of this transit route and the area surrounding to the global oil markets, things may become a lot worse very fast. In many ways, the problem for ships of countries seen as aligned to the U.S. travelling through the Red Sea begins before the Red Sea is reached – in fact, somewhere east of the Oman coast of the Arabian Sea, which then flows into the Gulf of Aden, on the south coast of Yemen. It is at this juncture that ships must pass through the crucial chokepoint of the Bab-el-Mandeb Strait. This 16-mile-width waterway flows between the west coast of Yemen on the one side, and the east coasts initially of Djibouti and then of Eritrea on the other, before it joins the Red Sea. As it stands, never has the literal translation of the chokepoint’s name from Arabic – ‘The Gate of Grief’ – been more apposite than it is now. From the beginning of the Israel-Hamas War that effectively began on 7 October, the Middle East’s leading Shia Islamic power, Iran, has been looking to catalyse an expansion of the direct conflict between those two protagonists into a wider war between Islam and the Jewish state of Israel, which it thinks could draw the U.S. and its allies into another no-win war in the region. Tehran’s attempts to mobilise Lebanon’s Hezbollah militants – a much bigger force than Hamas, which Iran also supports with money, weapons, and training – into a simultaneous full-scale war against Israel have so far been unsuccessful, due in large part to the extraordinarily accomplished diplomacy of U.S. Secretary of State Antony Blinken and his team. Similarly unsuccessful – and for the same reason – has been Iran’s call for an embargo on the exports of oil by Islamic states to Israel.