The Economist Asia Edition – July 27, 2019

TheEconomistJuly 27th 2019 33

1

C

ompared withJebel Ali in Dubai, it

feels like a sleepy Mediterranean har-

bour. The port at Fujairah, on the eastern

coast of the United Arab Emirates (uae),

serves mostly as a refuelling depot for

ships plying the Strait of Hormuz. It lacks

the cargo capacity and the high-tech wiz-

ardry of Jebel Ali, the largest port in the Gulf

and the ninth-busiest in the world. But Fu-

jairah is the uae’s only link to the high seas

that bypasses the troubled strait, and so it

has become a focal point amid worsening

tension between Iran and the West.

That tension rose on July 19th when

Iran’s navy seized the Stena Impero, a Brit-

ish tanker (pictured), as it sailed west

through the strait. The 30,000-tonne ship

is now anchored near Bandar Abbas, hos-

tage to a dispute that began on July 4th,

when Britain impounded an Iranian tanker

(allegedly bound for Syria) as it passed Gi-

braltar. In one of his final acts as foreign

secretary, Jeremy Hunt proposed setting up

a European task force to protect commer-

cial vessels in the Gulf.

Britain and its allies worry about the

threat to business and energy supplies. For

the Gulf Co-operation Council (gcc),

though, tensions with Iran border on an ex-

istential issue. Despite some hawkish rhet-

oric, Gulf states are nervous about Presi-

dent Donald Trump’s policy of imposing

“maximum pressure” on Iran. Conflict

threatens their infrastructure and could

hamper the oil and gas shipments that fill

their treasuries. “Who’s going to pay the

price? It’s us,” says a Qatari diplomat.

For all its threats, Iran cannot close the

Strait of Hormuz, the conduit for one-fifth

of the world’s traded oil and a quarter of its

liquefied natural gas. But it has already

raised the cost of commercial shipping. Fu-

jairah became a target in May, when four oil

tankers anchored offshore had holes

blown in their hulls. Iran is the prime sus-

pect, though investigators have not for-

mally assigned blame. The bunkering busi-

ness in Fujairah has suffered as a result.

Insurance premiums for the strait have

climbed by an average of 10%. For the larg-

est oil tankers, they have doubled, with a

transit now costing as much as $500,000 to

insure. Some shippers may decide not to

take the risk (and bear the cost) of sailing

through the strait. That is a concern for the

Gulf states, which rely on the waterway to

import everything from wheat to cars.

Three of them—Bahrain, Kuwait and Qa-

tar—have no other outlet to the sea.

Infrastructure on land is vulnerable too.

The Houthis, a Yemeni Shia militia backed

by Iran (and which sometimes acts as its

proxy), are fighting a Saudi-led coalition at

home. But they have also hit soft targets in

the region. In May the Houthis took credit

for striking an oil pipeline in Saudi Arabia

(American officials blamed Shia militias in

The Gulf crisis

Spiralling

FUJAIRAH

Tensions between Iran and the West have the Gulf states on edge

The

Gulf

Arabian

Sea

Red

Sea

IRAN

EGYPT

OMAN

BAHRAIN

KUWAIT

LEBANON

SYRIA

IRAQ

QATAR UAE

SAUDIARABIA

ISRAEL

Tehran

Riyadh

Al-Shuqaiq

Abha

Oilpipeline

JORDAN

Houthi

controlled

Government

controlled

YEMEN

Fujairah

Bandar

Abbas

Jebel Ali

Strait of

Hormuz

500 km

Fulldiplomatic

relations

Strained or no

diplomatic relations

Allies

Iran’s regional relations

Middle East & Africa

34 HowEgyptconqueredcroquet

34 Ethiopia’ssouthernproblem

35 ThestrugglesofCyrilRamaphosa

36 The problems with coal in Africa

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