PRESIDENT Trump has claimed that a deal with Iran was still possible but resumption of all round hostilities speaks otherwise, putting regional security and global economy on tenterhooks. It is height of contradictory attitude that the United States is bombing targets in Iran on the plea that Tehran was putting hurdles in the way of smooth and toll-free movement of commercial vessels through the Strait of Hormuz but now Washington itself has announced its intention to control the waterway and levy a 20% fee on the pretext of recovering expenditure to be incurred for the purpose.
The latest development has made the future of navigation through the strategically located water channel uncertain for the rest of the world for an indefinite period as Iran has declared unequivocally that it will not allow outside interference in the management of the Strait of Hormuz. Similarly, the goal of a toll-free movement of vessels (as was the case before the Gulf War) also becomes a distant dream with the US bent upon charging hefty fees and it makes no difference for the world whether the fee is charged by Iran or the United States. The United States has lost its moral ground for championing the cause of toll-free movement of oil and goods through the Strait as the just announced plans suggest it has designs to lay permanent hands on the management of the water channel and use it to earn money. There are also questions on the ability of the United States to provide the required level of security cover to the passing vessels as it could not do so in the past in the face of Iranian attacks on cargo ships and oil tankers that tried to navigate without coordination with Tehran. Trump has threatened to seize Hormuz and the US Central Command (Centcom) has announced resumption of blockade of Iranian ports. In response, Iran’s military has warned that it will not allow the US to “interfere” in the management of the Strait of Hormuz – after Trump said his country will become the “guardian” of the vital waterway. President Trump also said he believed the most effective way to put pressure on Iran was through a combination of a blockade and “hitting them”.
As the US attacks on Iran continued on Monday, Tehran said it would stop complying with a framework agreement signed in June to halt the fighting if Washington failed to meet its commitments. It also responded with attacks of its own targeting Gulf nations, with the powerful Revolutionary Guards (IRGC) announcing new strikes on Bahrain, Jordan, Kuwait and Oman. Iran’s Foreign Ministry spokesman Esmaeil Baqaei said the Islamabad Memorandum of Understanding was in ‘crisis’ but added Tehran was continuing talks with mediators from Pakistan, Qatar and Oman in an effort to prevent any further escalation. In fact, failure of the two sides to honour their written commitments and resumption of hostilities is not only badly impacting the global economy but also forcing regional countries to plan alternatives to guard against such a crisis in future. DP WORLD is planning to build a new port and a container terminal on the United Arab Emirates’ east coast that would reduce Dubai’s dependence on its flagship Jebel Ali hub and bypass the Strait of Hormuz. Saudi Arabia is diversifying and securing its energy and trade routes in a bid to reduce exposure to maritime blockades. Pakistan is also in contact with oil producing countries proposing them to build oil storage facilities in the country. It is, however, regrettable that the government is not in a hurry to firm up short, medium and long term planning and implementation to minimize impacts of oil shocks except exploring possibilities of determining oil prices on a daily basis to safeguard interests of oil marketing companies. This mindset has to change.
