The Daily View: Why shipping needs to watch out for an Iranian revolution 2.0
THE aftershocks of the overthrow of Iran’s monarch Mohammad Reza Pahlavi in 1979 have been felt across the Middle East and the entire world ever since.
Now the ousting of his theocratic successors seems a real possibility, despite their best blood-soaked efforts to suppress a mass movement that has reached insurrectional proportions.
We have been here before, of course. Millions joined a rebellion in 2009 after a presidential election was blatantly stolen from the reformist candidate. There was a similar popular response to an increase in fuel prices in 2019.
Major demonstrations around the slogan “Women, Life, Freedom” were witnessed in 2022, after the death of Mahsa Amini, severely beaten by police for the crime of wearing her hijab improperly.
On each occasion, Supreme Leader Ali Khamenei managed to cling to power. But the challenge he now faces appears greater than ever before. This is what a revolution looks like.
As always, political developments matter to shipping. Iran still exports an estimated 1.7m barrels of crude a day, although sanctions leave Western shipowners and marine insurers unable to touch the business.
That hasn’t stopped China, Türkiye, Iraq, the UAE and India from buying vast quantities of the stuff, of course, with the work going to the shadow fleet instead.
With a population of around 92m, there is also pent-up demand for liner services, although the big names give it a miss for much the same reason as tanker owners.
But there is a more immediate potential headache, as our Asia editor Cichen Shen reports today.
Ten months on from “liberation day”, Donald Trump has taken to Truth Social to pledge an additional 25% tariff on countries doing business with Iran. He also threatened military action, ostensibly in support of the protesters.
This will generate fresh uncertainty for our industry, especially for those involved in tanker trades in the Middle East and China’s sanctioned crude supply chain.
Trump has declared the move effective immediately, but there has been no official word on the small print.
With the Supreme Court expected to rule tomorrow on Trump’s wider tariff policy, commentators expect a legal challenge.
But even if he can make the proposal stick, it probably will not undermine China’s willingness to snap up discounted crude. Physical interdiction would be needed to achieve that.
Marine underwriters will be watching closely. Any US military intervention would likely cause a spike in war risk premiums in the Middle East Gulf.
On the other hand, regime change could eventually prove positive for compliant tanker trades, and eventually liners too.
What happens next will be decided on the streets of Iran’s major cities. But after decades of repression, its people deserve a government far better than the one under which they now suffer.
David Osler, Law and insurance editor
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