Iran's Strategies to Counter Naval Blockade / Asian Oil Market Is Not in US Hands

Senior Oil and Energy Expert

According to Ambassador Arjan's energy reporter, the disruption in oil tanker traffic through the Strait of Hormuz and the more than eight-fold jump in supertanker rental rates have once again put the cost of oil maritime transportation and the geopolitical consequences of disruption in the world's strategic energy corridors in the spotlight. A situation that has not only affected the equations of the global oil market, but also complicated the competition among major oil producers to maintain their share in the Asian markets.

In the meantime, to what extent can the increase in oil transportation costs change the market equations, and what opportunities and threats does Iran face under the simultaneous conditions of sanctions and maritime restrictions?

In this regard, Mohammad Sadegh Mehrjo, a senior expert in the oil and energy field, in a conversation with Sefir Arjan's analytical news site, investigated the factors of the increase in tanker rental rates, the impact of this situation on the competition of American oil with Middle Eastern and Russian producers in the Asian market, the outlook for oil prices and the consequences of the disruption in the Strait of Hormuz for Iran's oil exports. You can read the full text of this conversation below.

Ambassador Arjan: The disturbance in the Strait of Hormuz has caused a jump of more than 8 times in the rental rate of supertankers and the cost of transporting American oil to Asia has reached about 38.5 dollars per barrel; Do you think this jump is more due to the increase in war insurance premiums or the real shortage of supertanker fleet in alternative routes?

One of the reasons for the increase in ship rental rates is the increase in insurance rates. Another major factor is the increase in factor rates. Recently, there have been reports that on some routes, especially the Middle East routes, ship captains have increased their wages on a daily basis. Also, sailors who work on ships, especially oil tankers, demand higher wages due to the risks involved in traveling in these dangerous areas.

The increase in insurance rates is one of the effective factors in this field, and other costs have also increased. Of course, the decrease in the number of oil tankers cannot be considered simply because the vessels are at risk or being targeted. So far, a limited number of oil tankers have been targeted, and compared to the number of oil tankers operating around the world, this figure is still not very high. Some tankers are repairable, in the sense that the location of their hit or damage is not such that, for example, a very large hole is created in the hull of the ship. In such a situation, it is possible to repair the ship. However, some tankers, including those that have been targeted recently, have been severely damaged, such that the ship's hull has been directly targeted and very large holes have been created in it, or the ship's engine room has been completely disabled. These ships need major repairs and complete reconstruction.

Ambassador Arjan: With this level of transportation cost of 38.5 dollars per barrel, how will the share of American oil in the Asian markets (China and India) change in competition with Middle Eastern and Russian oil? Will Asian refineries bear this cost?

The major share of American oil is consumed in the domestic market of this country, and a maximum part of it is exported to the allied countries of the United States in the Western bloc. America still does not have a significant share of the Asian market, and this market is mostly in the hands of Middle Eastern countries and Russia. Currently, Saudi Arabia and Russia are still the two main sides of crude oil production in the world.

The Asian market is not in the hands of America

It can be said that the Asian market is currently not in the hands of America; Although the crude oil production of this country is more than other countries. Asian refineries, especially Chinese and Indian refineries, sourced most of their crude oil from Russia, as well as Middle Eastern countries including Saudi Arabia and Iraq. Currently, Russia can manage its oil transportation routes by taking measures to bypass the Middle East region and deliver its oil to the destination markets. Also, this country can compensate part of the transportation costs by offering discounts. Considering that the sanctions on the sale of Russian crude oil are still in question, this country uses such measures. Saudi Arabia can also maintain its customers in East Asia by taking necessary measures.

Ambassador Arjan: Do the current disruptions in the energy corridors have only a temporary effect on the price of oil and transportation costs, or does the stable reduction of prices and the return of stability to the oil market depend on the long-term removal of geopolitical threats?

The current disruptions based on previous experiences including the 12-day war and the 40-day war have shown that the oil market faces a drop in crude oil prices as soon as the situation shows signs of calming down. However, the return of prices from the range of 90 to 100 dollars to the channel of 70 dollars depends on several factors, including the long-term assurance of the removal of geopolitical threats and the reduction of risks related to sea transportation and insurance. This will not happen at least in the next six months due to the increase in seasonal demand. However, from March 2026, due to the increase in supply, it can be expected that with the reduction of threats, especially in sensitive crossings such as the Strait of Hormuz and Bab al-Mandab, signs of a noticeable decrease in prices and market stability will be observed.

Ambassador Arjan: From Iran's point of view, what opportunities and threats have the current situation and disruption in the Strait of Hormuz created for oil exports and the country's position in the Asian market?

In the current situation, there are two main issues facing Iran; Sanctions and maritime blockade, Iran has been able to deal with the issue of sanctions by using the methods it has. In this context, China's independent refineries, known as "Teapots", supply part of their required oil from Iran by accepting existing risks. Also, the countries that have faced oil sales sanctions have been able to continue their activities by accepting these risks and using the existing discounts.

Iran has been faced with oil sales sanctions in various periods, including the last 15 years. Only during the JCPOA period, there were no sanctions on oil sales for about a year and a half; At other times, the country has always been under sanctions and has been able to bypass these restrictions by using its own methods. However, the sea blockade that has been formed especially since the 40-day war has made the situation somewhat more difficult.

Iran's solutions to deal with the naval blockade

There are also solutions to deal with the naval blockade. The countries of the Persian Gulf have also tried in some way to solve the threats and problems related to the Strait of Hormuz. The current situation shows that around 13 to 14 million barrels of oil supply in the world market has been disrupted per day. This is a significant amount and this issue has caused the price to increase. In such a situation, any country that can overcome the situation in the Strait of Hormuz or adapt to it, can use the high prices of crude oil to earn more money.

In this situation, Iran is facing both threats and opportunities. In other words, in the current situation, opportunities and threats are facing the country at the same time. Iran provides most of the needs of its refineries from domestic production, but the countries that saw their rich incomes from exporting crude oil are in danger, it can be said that they have faced bigger problems. For example, Saudi Arabia, which had a significant income from crude oil exports, as well as Kuwait, have faced losses following the recent developments and war. All in all, Iran should also try to adapt to the new conditions and make the most of the available opportunities.