ASIa News Report: As an important meeting between Iran and other PeRSIan Gulf states was delayed, the Middle East diplomatic situation appeared to hit a setback as Monday arrived. Meanwhile, fresh attacks near the region’s two most vital oil shipping routes have further stoked market concerns over global energy supply.
When markets reopened on Monday (Sep 14), international oil prices surged sharply. The latest developments are threatening crude supplies from Saudi Arabia, the world’s largest oil exporter.
Saudi Arabia’s key east-west oil pipeline stretching roughly 1,200 kilometers (745 miles) has remained shut over the weekend after being damaged in a drone attack last Friday.
Hopes for a near-term diplomatic breakthrough have cooled accordingly.
Oman’s Foreign Minister Sayyid Badr Albusaidi said late Sunday that a regional meeting originally scheduled for Monday had been postponed, citing the need "to reach consensus".
Earlier, Iranian officials stated they planned to attend the meeting with Gulf Arab states and present an agreement reached between Iran and Oman on managing shipping lanes in the Strait of Hormuz.
Iran’s Fars News Agency quoted an Iranian foreign ministry official saying the Oman meeting was postponed at the request of some regional countries, and the decision was made jointly by Tehran and Muscat.
The official added that Iran will coordinate with Oman to set a suitable date for holding the meeting.
Ahead of the postponement of this critical meeting, Saudi Arabia had just decided to shut its key oil pipeline, which remains out of operation for the time being. This pipeline had long served as a major alternative route for Middle Eastern crude to bypass the Strait of Hormuz.
At the same time, shipping risks in the Strait of Hormuz itself keep mounting.
The UK Maritime Trade Operations (UKMTO) said on Sunday that a vessel was struck by an unknown projectile while transiting the Strait of Hormuz, sparking a fire and forcing the crew to evacuate urgently.
On the other hand, Iran reported that an Iranian merchant ship was attacked off its coast, leaving one person dead and four crew members injured.
This means Middle East energy transportation is now facing "dual risks": on one hand, Saudi Arabia’s east-west pipeline, a vital alternative route to bypass the Strait of Hormuz, has been closed following an attack; on the other hand, vessel safety risks within the Strait of Hormuz continue to rise. With the sudden postponement of the planned diplomatic meeting, market expectations for a rapid de-escalation of tensions have been dampened.