Outlook: Implications of Soleimani’s Death on Shipping IndustryJanuary 10, 2020 in Uncategorized
The United States’ assassination of General Qassem Soleimani has heightened security concerns about shipping in the Gulf region, notably the Strait of Hormuz, as the world warily awaits to see how Iran will respond to the killing of its military commander. The US strike that killed the military commander effectively marks a significant escalation in tensions between Washington and Tehran, with Iran launching a ballistic missile attack days later. On 8 January, Ukraine International Airlines flight PS752 crashed shortly after taking off from Tehran, killing all 176 passengers and crewmembers on board. The reason for the crash is currently under investigation, with Iranian authorities blaming technical issues, though the crash’s timing, just hours after Iran launched missiles at US targets in Iraq, has provoked speculation about other possible causes. On 9 January, Canadian Prime Minister Justin Trudeau announced during a press conference that evidence suggested an Iranian missile brought down the aircraft by accident. With Iran already rejecting the claims, tensions are likely to further escalate in the coming days and weeks as further information pertaining to the crash is released.
KILLING OF SOLEIMANI
On 3 January 2020, US officials announced that Iran’s most powerful military commander, General Qassem Soleimani, had been killed by a US air strike in neighbouring Iraq. Soleimani had spearheaded Iranian military operations in the Middle East as head of Iran’s elite Quds Force. He was killed at Baghdad airport, along with other Iran-backed militia figures, early on Friday in a strike that was ordered by US President Donald Trump. Speaking shortly after the confirmation of the strike, President Trump disclosed that Soleimani was “directly and indirectly responsible for the deaths of millions of people.” Iran’s Supreme Leader Ayatollah Ali Khamenei has stated that “severe revenge awaits the criminals” behind the attack as he announced three days of national mourning.
On 8 January, Iran carried out a ballistic missile attack on air bases housing US forces in Iraq. More than a dozen missiles were launched from Iran, striking two air bases in Irbil and Al Asad, west of Baghdad. The strikes, which occurred at about 2:00 AM local time (10:30 PM GMT), occurred just hours after the burial of Soleimani. While it is believed that the strikes were in retaliation of Soleimani’s killing, with Iran’s Supreme Leader Ayatollah Khamenei stating that the attack was a “slap in the face” for the US, Iranian Foreign Minister Mohammad Javid Zarif later issued a statement on Twitter, claiming that the attack was self-defence while denying that Iran was seeking to escalate the situation into war. So far there has been minimal response from Washington, with President Trump tweeting that all was well and that casualties and damage were being assessed.
Soleimani was widely seen as the second most powerful figure in Iran behind Supreme Leader Ayatollah Khamenei. The Quds Force, which is an elite unit of the Iranian Revolutionary Guards, reported directly to the ayatollah and Soleimani was hailed as a heroic national figure. Under Soleimani’s leadership, Iran had bolstered Hezbollah in Lebanon as well as other pro-Iranian militant groups, effectively expanding its military presence in neighbouring Iraq as well as in Syria, where it orchestrated Syria’s offensive against rebel groups in that country’s long-running civil war. The US however has called the commander and the Quds Force terrorists, holding them responsible for the deaths of hundreds of US personnel. A statement released by the Pentagon shortly after his death disclosed that Soleimani had been “developing plans to attack American diplomats and service members in Iraq and throughout the region,” adding that “this strike was aimed at deterring future Iranian attack plans.”
The crash of flight PS752 has further complicated tensions with Iran, with Western leaders stating that evidence suggests that the plane had been hit by a surface-to-air missile, possibly in error. US media have speculated that the airline may have been mistaken for a warplane as Iran prepared for possible US retaliation, while a new video released on 10 January appears to show a plane being hit by a projectile over Tehran. Iran however has rejected the suggestions, with the country’s civil aviation chief stating on Friday that he was “certain” that the plane was not it by a missile. During a news conference on Friday, Iran’s Civil Aviation Organization (CAOI) chief Ali Abedzadeh repeated his view that a missile was not the cause of the crash. He told reporters, “the thing that is clear to us and that we can say with certainty is that this plane was not hit by a missile,” adding “as I said last night, this plane for more than one and a half minutes was on fire and was in the air, and the location shows that the pilot was attempting to return.” The statement comes after Iran’s government spokesman Ali Rabiei on Thursday accused the US and its allies of “lying and engaging in psychological warfare” in their speculation over the cause of the accident. Separately an Iranian official disclosed on Friday that there was documentation to prove that the plane had a mechanical issue before take-off. According to the official, it was not signed off for flying, but Ukrainian airline officials had overruled these objections, though no further details have been released.
Iran has promised to carry out a full investigation, though there are growing concerns about the transparency of its findings. While Iran initially indicated that it would not hand over the recovered “black boxes” to Boeing, the plane’s manufacturer, or to the US, the US National Transportation Safety Board (NTSB) has since confirmed that it has been invited to take part in the investigation and would send a representative. The Transportation Safety Board of Canada and France’s BEA air accident agency have also confirmed that they have been invited to take part in the investigation. TV images from the crash site on Thursday depicted a bulldozer to clear debris away, raising concerns that vital evidence could have been removed. The “black box” flight recorders have been recovered from the wreckage, with Iran’s official Irna news agency reporting that they will be opened on Friday.
All 176 passengers and crewmembers on board the plane were killed. Victims of the crash include 82 Iranians, 63 Canadians, 11 Ukrainians as well as nationals from Sweden, the United Kingdom, Afghanistan and Germany. In the wake of the crash and missile attacks a number of airlines have announced that they are re-routing flights that fly over Iran and Iraqi airspace. Major carriers include Air France, Lufthansa, Qantas, Singapore Airlines, Malaysia Airlines and Taiwan’s Eva Air, which have all announced that they will opt for different routes for their flights to and from Europe. The US Federal Aviation Agency has restricted commercial US flights “from operating in the airspace over Iraq, Iran and the waters of the Persian Gulf and the Gulf of Oman.” Russian authorities have also recommended that their country’s airlines avoid the same areas. As of 10 January 2020, Turkish flag carrier Turkish Airline and Turkish low-cost carrier Pegasus Airlines as well as Qatar Airways continue to fly over Iran as usual. British Airways and Virgin Atlantic have both disclosed that they are monitoring the situation, though they have not yet diverted flights.
IMPACT ON SHIPPING INDUSTRY
In the wake of Soleimani’s death, the missile attack and crash of flight PS752 tensions between the US and Iran have significantly risen and there has been growing concern about shipping in the Gulf region. In particular, the airplane crash has demonstrated how fragile the current situation is, indicating that the shipping industry could also fall victim to unintended consequences stemming for the heightened tensions.
The Gulf’s waters however have already been considered as being vulnerable to Iranian retaliation ever since President Trump in 2015 withdrew the US from the nuclear deal, which Tehran had signed with world powers, and imposed sanctions on the country. The Strait of Hormuz a narrow but strategically important waterway, links crude producers in the Middle East with key global markets. In May and June 2019, the waterway became a focal point in heightened US-Iran tensions when six oil tankers were attacked in, or near, the waterway. Furthermore, Iran has in the past repeatedly vowed to disrupt oil and petrochemical flows through the Strait of Hormuz, through which about a third of the world’s seaborne oil passes, in the event that it was unable to export its crude.
With the current dramatic escalation of tensions between the US and Iran, there are increasing concerns that a widening conflict could disrupt global oil supplies and impact shipping in the region. With a number of countries in the region, including Saudi Arabia and the United Arab Emirates which have both backed President Trump’s maximum pressure strategy against Iran, calling for restraint since Soleimani was killed, it is likely that any response from Iran will be asymmetric in nature, resulting in the shipping community and vessels transiting this region needing to take additional precautions while also being prepared for the unexpected. While so far, shipping flows via the Strait of Hormuz have had little change since the targeted killing of Soleimani, it is likely that Iran will resume threatening commercial shipping in the Gulf and could launch similar attacks to those that were carried out last year.
In the wake of heightened tensions, the US Maritime Administration on 2 January 2020 issued an alert over potential Iranian action against “maritime interests in the region.” It noted that US commercial vessels operating in the area should review the US Maritime Advisory 2019-012. Meanwhile the UK has again increased its military presence in the Gulf. On 4 January, the UK announced that the Royal Navy will offer to accompany British-flagged commercial vessels through the Strait of Hormuz. Britain’s Defence Minister Ben Wallace ordered HMS MONTROSE and HMS DEFENDER to prepare to return to escort duties. The UK has also put military helicopters on standby. There have also been reports that insurance underwriters are likely to increase rates in the coming days to reflect perceptions of a greater war risk for shipping in the Gulf. In May 2019, the Joint War Committee widened the area around the Gulf for “enhanced risk for marine insurers” after a number of attacks targeting tankers. Washington blamed Iran’s elite Revolutionary Guards for two sabotage attacks that targeted tankers in the Gulf in May and June. In July, the guards seized a British-flagged tanker in the Gulf in retaliation for the UK’s detention of an Iranian tanker off the coast of Gibraltar. After that incident, the UK navy escorted vessels through the Strait of Hormuz, though those escorts concluded in November in the wake of the tanks being released and tensions between the two countries easing.
OUTLOOK AND GUIDANCE
With a diplomatic solution between the US and Iran currently unlikely, the situation in the Gulf region could destabilize further. Vessels transiting this region are advised of the following:
- Vessels operating in the region must remain vigilant and listen for military warnings at all times;
- Armed private security should not be used as a risk mitigation measure in this region;
- Navigational norms in the Strait of Hormuz should continue to be complied with.
In addition, shipping companies are advised to review BMP5 practices, US maritime advisories, industry releasable threat bulletins, flag security advisories and bulletins, as well as the ship’s hull and machinery, war risk and P&I Insurances prior to transiting this region in order to ensure that the vessel has cover and remains within cover throughout the voyage.
The following vessel guidance should be implemented:
- Undertake a new ship- and voyage-specific threat risk assessment prior to entering any region where there has been an incident, or where the threat has changed;
- Where transit includes passage through a confined strait, if navigationally safe to do so, vessels should consider unmanned machinery spaces (UMS) for the duration;
- Vessels should consider transiting at full speed while ensuring that this is only done where it is commensurate with safe navigation and manoeuvring permits;
- Consider if a day/night transit is appropriate to the threat posed;
- After the risk assessment, review the Ship’s Security Plan and Vessel Hardening Plan;
Carry out security damage control training and exercises prior to entering area of increased risk.