Choppy waters ahead as Red Sea tensions escalate

The disruption has already led to a rise in oil costs, with the price of Brent crude rising by 2 percent to $78.58 a barrel yesterday as firms reroute their vessels to avoid the region. For the moment the disruption “seems to not have had an enormous impact [on oil prices],” Dan Marks, a research fellow for energy security at the Royal United Services Institute, told MTUK, adding that he would be “surprised if out of this there was a really severe oil-pricing shock.” Tobias Borck, senior research fellow for Middle East security at RUSI, downplayed the risk of a major escalation. “Washington and London – and for that matter, Europeans – will want to ensure that this doesn’t turn into another Western war in the Middle East, but rather become something more akin to the anti-piracy operations at the beginning of the last decade,” he told MTUK. “The problem is that it could well become a fairly drawn-out and long-term military effort with potentially unpredictable consequences.” Borck sees Iran’s deployment of a warship to the Red Sea as “symbolic move.” “Iran can’t possibly think that with one warship and a bunch of Houthi speedboats they would be a match for or even start deterring the U.S. navy — much less a U.S. navy that is backed by other countries.”