The Greek government on Monday warned vessels to avoid any shipping routes controlled by Iran after Iranian forces seized two Greek-flagged oil tankers late last week in retaliation over the U.S. seizure of tankers carrying Iranian crude off the coast of Greece.
In a statement made to the Financial Times, Greek Shipping Minister Ioannis Plakiotakis strongly recommended that Greek-flagged vessels avoid Iranian-controlled shipping lanes, such as the Strait of Hormuz, expecting further retaliatory actions from Iran.
This Greek Shipping Ministry's statement suggests that the Strait of Hormuz is no longer safe for Western-flagged vessels, suggesting destabilization that could further push oil prices up from their high on Monday of nearly $121 per barrel for Brent and over $116 for WTI.
The narrow Strait of Hormuz is patrolled by Iran's Revolutionary Guards.
Late last week, The Associated Press released satellite photos purporting to demonstrate that the Revolutionary Guards are building a "massive" new ship near the Strait in a bid to expand its naval presence here. AP cited Fars news agency as stating that a "range of new defense and combat innovations for the construction of heavy vessels … can maintain Iran's authority over the Persian Gulf and the [Gulf] of Oman always in the face of transregional enemies".
On Friday, the Revolutionary Guards seized two Greek oil tankers in the Persian Gulf in response to the U.S. seizure earlier in that week of Iranian crude from an Iran-flagged vessel in the Mediterranean Sea for violating sanctions.
The tit-for-tat along global shipping routes comes as a nuclear deal with Iran that would ease sanctions falters, with the Revolutionary Guards at the heart of a breakdown in negotiations, as Iran demands the group be removed from Washington's FTO (foreign terrorist organizations) list.
Last week, Robert Malley, the U.S. special envoy for Iran, said "we do not have a deal and prospects for reaching one are tenuous at best," adding that "If Iran maintains demands that we go beyond the scope of the JCPOA, we will continue to reject them and there will be no deal."
By Charles Kennedy for Oilprice.com
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