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Shippers mask positions, weigh options amid Red Sea attacks

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A number of container ships are anchored in the Red Sea and others have turned off tracking systems as traders adjust routes and prices in response to maritime attacks by Yemen’s Iran-aligned Houthis on the world’s main East-West trade route.

Attacks in recent days on ships in the major Red Sea shipping route have raised the specter of another bout of disruption to international commerce following the upheaval of the COVID pandemic, and prompted a U.S.-led international force to patrol waters near Yemen, Reuters reported.

The Red Sea is linked to the Mediterranean by the Suez Canal, which creates the shortest shipping route between Europe and Asia. About 12% of world shipping traffic transits the canal.

Major shippers including Hapag Lloyd (HLAG.DE), MSC and Maersk (MAERSKb.CO), oil major BP (BP.L) and oil tanker group Frontline (FRO.OL) have said they will be avoiding the Red Sea route and re-routing via southern Africa’s Cape of Good Hope.

But many ships are still plying the waterway. Several ships underway have armed guards on board, LSEG data showed.

At least 11 container ships which had passed through Suez and were approaching Yemen carrying consumer goods and grains bound for countries including Singapore, Malaysia and the United Arab Emirates, are now anchored in the Red Sea between Sudan and Saudi Arabia, LSEG shiptracking data showed.

Four MSC container ships in the Red Sea have had their transponders turned off since Dec. 17, the data showed, likely to avoid detection.

Some vessels are attempting to mask their positions by pinging on other locations, as a safety precaution when entering the Yemen coastline, said Ioannis Papadimitriou, senior freight analyst at Vortexa.

Denmark’s Maersk on Friday paused all container shipments through the Red Sea following a “near-miss incident” involving its vessel Maersk Gibraltar a day earlier. A number of the ships at anchor in the Red Sea are Maersk vessels, LSEG data showed.

On Tuesday it said vessels previously paused and due to sail through the southern Red Sea and the Gulf of Aden would be rerouted around Africa.

The Iran-backed Houthis, who say they are supporting Palestinians under siege by Israel in the Gaza Strip, have waded into the Israel-Hamas conflict by attacking vessels in vital shipping lanes and even firing drones and missiles at Israel, more than 1,000 miles from the Yemeni capital Sanaa.

Houthis attacked two commercial shipping vessels in the southern Red Sea on Monday.

Industry sources say the impact on global trade will depend on how long the crisis persists, but insurance premiums and longer routes would be immediate burdens.

Vortexa’s Papadimitriou on Tuesday said the price of a Suezmax to carry crude from the Middle East to Europe has risen 25% in a week.

The disruption to energy flows in the Red Sea is unlikely to have large effects on crude and liquefied natural gas (LNG) prices, Goldman Sachs said on Monday, as vessels can be redirected.

“We do estimate that a hypothetical prolonged redirection of all 7 million barrels per day of gross (Northbound and Southbound) oil flows would raise spot crude prices relative to long-dated prices by $3-4/per barrel

Regional

Iran airlines cancel flights as US sanctions hit

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Iranian airlines cancelled some international flights on Wednesday after the United States imposed new sanctions targeting Iran’s aviation sector.

Georgia and Azerbaijan confirmed the suspension of flights to Iran, while a travel agent in Tehran told AFP that flights to Baghdad, Muscat and Qatar had also been halted. Flights to several other destinations, including China, continued.

The new US measures were announced by Treasury Secretary Scott Bessent on Monday as Washington seeks to increase economic pressure on Tehran amid the ongoing conflict.

“We are squeezing the Iranians like they’ve never seen,” Bessent told Fox News on Wednesday, claiming that more than 80% to 90% of Iran’s international flights had been affected.

Iranian President Masoud Pezeshkian, who is attending the United Nations General Assembly in New York, rejected the pressure.

“The resistance of the Iranian people will only intensify in the face of sanctions, mounting pressure and growing intimidation” from the United States, Pezeshkian said.

Iran’s aviation industry has faced US sanctions for years, but the latest measures could further restrict international connections.

Despite the new sanctions, flight-tracking data showed a Mahan Air flight from Tehran arriving in Guangzhou, China, on Wednesday. A flight to Shanghai was also scheduled to depart from Tehran’s international airport.

China has opposed the new US sanctions, describing them as illegal.

Some flights to Istanbul also continued, although others were cancelled, according to the Tehran-based travel agent, who said the situation remained uncertain.

“The situation is unstable and we are no longer selling tickets for the time being for fear of cancellations,” the agent told AFP.

Flights connecting Iran with Turkey and Armenia were also still possible on some smaller Iranian airlines, while flights to Najaf in Iraq and Dubai in the United Arab Emirates were listed as scheduled.

Mohsen Rezaei, head of Iran’s Supreme National Security Council, warned neighbouring countries against complying with the US measures.

“If a country cooperates with or embarks on adventures with the United States, its airports will no longer be able to operate flights” to Iran, he told Iranian state television.

The possible suspension of flights between Iran and Iraq has raised particular concerns because of the large number of Iranian religious pilgrims who travel to Iraq.

Iranian media reported that authorities were considering rerouting flights from Baghdad to Najaf. AFP also reported that several sources in Iraq said Baghdad would comply with the US sanctions, although the Iraqi government had not publicly announced a flight ban.

Travel agents in Najaf said passengers were seeking information about possible cancellations and considering travelling by land instead.

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US and Iran hold first talks since June after Trump’s ‘annihilation’ threat

WATCH Donald Trump’s speech to UNGA on Iran, including his ‘annihilation’ threat

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The United States and Iran have held their first high-level talks since June, with discussions taking place on the sidelines of the United Nations General Assembly in New York amid continued fighting and growing international pressure to end the conflict.

Iranian Foreign Minister Abbas Araghchi and US special envoy Steve Witkoff took part in the talks, which were mediated by Qatar. US envoy Jared Kushner also participated on the American side, according to reports.

No breakthrough was immediately reported. Witkoff said the two sides had completed a round of discussions that he hoped would prove “constructive and promising”, adding that mediators would continue their efforts.

Iranian officials said Araghchi conveyed Tehran’s conditions, including an end to what Iran describes as US acts of aggression and the lifting of measures affecting Iranian shipping and assets.

The talks came just hours after US President Donald Trump warned in his address to the UN General Assembly that he could “annihilate” Iran if no agreement was reached.

Trump said Iran faced a choice between reaching a deal and what he described as destruction, while also saying he believed an agreement could be reached after the US midterm elections in November.

Trump later described the three-hour discussions as very productive. Witkoff, however, clarified that the two sides communicated through mediators who shuttled between the delegations rather than holding direct face-to-face negotiations.

The latest contact follows months of conflict between Iran, Israel and the United States. The fighting has also disrupted shipping through the Strait of Hormuz, one of the world’s most important energy routes.

Iran has indicated that it could reopen the strategic waterway if Washington takes steps to ease military and economic pressure on Tehran. Iranian officials have linked the issue to demands including the lifting of the US naval blockade and the release of frozen Iranian assets.

The Strait of Hormuz is a key route for global energy supplies, and its closure has contributed to volatility in international oil markets.

Despite the renewed diplomatic contact, significant differences remain between Washington and Tehran over the war, Iran’s nuclear programme, sanctions, shipping through the Strait of Hormuz and US military operations in the region.

Iranian President Masoud Pezeshkian is due to address the UN General Assembly on Wednesday, with further diplomatic efforts expected to continue in New York.

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Pezeshkian heads to UN as Iran vows to defend its position

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Iranian President Masoud Pezeshkian left Tehran for New York on Tuesday to attend the 81st United Nations General Assembly, where he says he will defend Iran’s positions and highlight what Tehran describes as the hardships facing its people and the wider region.

Speaking at a press conference before his departure on Tuesday, Pezeshkian said the UN gathering provides Iran with an opportunity to present its views to the international community.
“We will defend our positions with strength at international forums,” he said.

Pezeshkian said he would meet politicians, cultural figures and media representatives during his visit and discuss issues including regional conflicts, international law and what he described as violations of commitments made to Iran during previous negotiations.

Iranian Foreign Minister Abbas Araghchi is already in New York. He arrived on Monday ahead of the General Assembly and is expected to hold talks and consultations with foreign officials during the UN gathering.

Araghchi has said Iran’s main objective at the UN is to defend the rights and interests of the Iranian people and use the gathering as a platform for diplomacy.

The Iranian delegation’s presence comes amid ongoing tensions between Tehran and Washington.

A senior Iranian official told Reuters on Tuesday that Iran was prepared to reopen the Strait of Hormuz within seven days if the United States eased military pressure and lifted its blockade of Iranian ports. The official said the Iranian delegation in New York had full authority to pursue diplomatic discussions.

Pezeshkian meanwhile said Iran had repeatedly entered negotiations and agreements only to see the other side fail to honour its commitments. He argued that lasting peace and security required respect for the rights of nations and individuals.

He also criticised military actions and developments in Gaza and other parts of the Middle East, saying attacks on civilians and public facilities could not simply be justified as counter-terrorism measures.

Pezeshkian is expected to address the UN General Assembly on Wednesday. His visit comes as the United States and Iran remain at odds over the conflict and the possibility of renewed diplomacy.

The Iranian president has said his trip will be aimed at presenting Iran’s position, explaining developments in the region and conveying what he called the message of the Iranian people to the international community.

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