US wants help protecting Middle East oil flow: Update

  • Market: Crude oil
  • 25/06/19

Adds qualifying comments from US officials

The US administration is looking to put together an international coalition to protect the flow of oil from the Middle East.

But first it expects Mideast Gulf Arab producers or consumers of their oil to ask for such help, US officials said.

"There is a lot of interest in finding a new initiative to enhance maritime security, and it is something we think needs to be internationalized," State Department special Iran envoy Brian Hook said today. "If you look at the attack in Fujairah, I think there were 17 countries that were adversely affected by those attacks," he said in reference to the incidents in May that damaged four tankers off the UAE coast.

Secretary of state Mike Pompeo raised the issue in his meetings with Saudi King Salman bin Abdul-Aziz in Jeddah and UAE crown prince Mohammed bin Zayed in Abu Dhabi today and is expected to discuss it during his visits later this week to the UAE, India and Japan, where he will attend the G20 summit of major economies.

The purpose of Pompeo's visit to Saudi Arabia and the UAE was "both to ascertain the nature of the threat and the willingness of the regional partners and those with an economic stake (to maintain) free and sustained access to the region's resources," a senior administration official said later today.

But the official added that the discussions are preliminary. The US has yet to receive requests to escort oil tankers through the strait of Hormuz, the official said. "I do not think we have gotten to the point yet where we have concrete requests or demands from the parties in question, including those attacked by Iran."

Every US administration since the late 1970s has asserted its right to provide military security to ensure the unencumbered flow of oil from the Middle East, particularly around the strait of Hormuz, through which 21mn b/d of oil flowed last year.

That policy is being tested now that the US has begun to enforce sanctions on Iranian crude exports. Tehran has warned that it would prevent the flow of oil through the strait if Washington succeeds in cutting off Iran's oil exports.

Crude exports from Iran have averaged 400,000 b/d so far in June, another senior US official said, citing commercially available data. "Our intent is (for Iranian exports) to go to zero, and we are well on our way to do so," the official said.

The US has blamed Iran and its proxies for staging recent attacks on six oil tankers and oil infrastructure in Saudi Arabia. Iran denies involvement.

The US, Saudi Arabia, the UAE and the UK in a joint statement today said the attacks "threaten the international waterways that we all rely on for shipping. Ships and their crews must be allowed to pass through international waters safely."

The US has combined accusations against Tehran with statements suggesting that the attacks on tankers were of little concern because they did not directly affect the US. Washington then suggested that the attacks should be of greater concern to other countries.

China, South Korea and Japan rely on the Mideast Gulf oil for majority of its supply and must contribute to the freedom of navigation in that region, US officials say. "If we take this on as a US-only responsibility, the nations that benefit from the movement of oil through the Strait of Hormuz and the Persian Gulf are bearing little or no responsibility for the actual economic benefit that they gain," US Joint Chiefs of Staff vice chair, general Paul Selva, said last week.

"So why are we protecting the shipping lanes for other countries (many years) for zero compensation. All of these countries should be protecting their own ships on what has always been a dangerous journey," President Donald Trump tweeted today.

India last week announced a planned deployment to the Mideast Gulf to protect Indian-flagged vessels. But Beijing has sought to shift the conversation, suggesting that the US should refrain from taking any steps that may escalate the conflict and threaten oil shipping in the region.

The request for help from China is also surprising because the US administration has consistently protested what it sees as Beijing's more assertive military posture in the Pacific and Indian oceans.

The US last put together an international coalition engaged in protecting oil shipping in the Mideast Gulf through a convoy system in the 1980s, in the final years of the Iraq-Iran war, when oil tankers from non-combatant nations came under attack.

"I am familiar with what we have been required to do in the past to protect international shipping from the Iranian threat and it is something under active consideration," the administration official said.


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