Various sources are reporting two petroleum tankers have been attacked in the Gulf of Oman region. Both are said to be on fire and their crews evacuated. Obviously tens of millions of dollars will be lost by various investors.
Thinking about how such can play out going forward, expect the people who insure ships and cargo - usually identified as Lloyds of London - to either begin to refuse to insure such ships and cargo or to raise the price of such insurance markedly. The cascade of effects from this can be very large, higher oil prices, shortages of petrochemical and fuel, even military action,
On the other hand, if there are no more such attacks perhaps it will all amount to nothing much. Both shippers and insurers would prefer this latter course. Business as usual is very lucrative and tends to be preferred always.
One source, the Jerusalem Center for Public Affairs, notes a certain tit-for-tat pattern of fires on Iranian ships almost immediately after the two tankers were attacked. It is possible a sort of Putin-esque hybrid war of indirection, below-the-radar, is going on between actors in the region.
War in the Middle East, however limited in scope, could be a “black swan” that can scramble political outcomes in Europe and the U.S. Let’s see what develops.
