Geopolitical conflicts spreading? After Hormuz, oil tankers are also being bombed in the Mediterranean.
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Global key energy transport routes are facing simultaneous pressures. As tensions in the Strait of Hormuz remain high, a new oil tanker attack has unexpectedly occurred in the Mediterranean, further fueling anxiety in the energy market.
According to the Malta Times, on Tuesday local time, the Russian-flagged LNG tanker "Arctic Metagaz" exploded in the Mediterranean Sea between Malta and Libya. The vessel is said to belong to Russia's "shadow fleet".
The report cites analysis from UK security agency EOS Risk Group, which defines the incident as a "drone attack", with Reuters quoting sources saying Ukraine is suspected to be the mastermind.
According to CCTV News, late on March 2 local time, a senior adviser to the Iranian Islamic Revolutionary Guard Corps stated that the Strait of Hormuz has been closed, and Iran will strike against any vessel attempting to pass through.
The situation in the Strait of Hormuz also remains unresolved. The Iranian Islamic Revolutionary Guard Corps has launched attacks on multiple oil and gas facilities and tankers in Gulf countries, causing vessel traffic in this global energy choke point to briefly drop to zero.
Under this double blow, the energy market volatility index OVX soared to historically rare highs, with implied daily price volatility reaching 4.7%, second only to the negative oil price crisis of 2020.
To respond to the crisis, US President Trump announced on Tuesday that the US International Development Finance Corporation would provide political risk insurance for “all maritime trade” and promised to deploy naval escorts in the Strait of Hormuz to ensure smooth passage.
From the Gulf to the Mediterranean, energy transport routes are facing multi-point challenges, and the market is pricing in wider-ranging supply disruptions. Since the US and Israel attacked Iran, international crude oil futures prices have continued to climb. As of Tuesday's close, US oil and Brent oil have surged over 11% and 12% respectively in the last two sessions. As traders gradually assess the effectiveness of Trump’s escort promise, momentum for further price rises has slowed. As of press time, WTI crude was up nearly 1% intraday.
Mediterranean oil tanker explosion: Ukraine accused as mastermind
The Arctic Metagaz incident is the latest example of the worsening security situation for Mediterranean shipping. Citing multiple sources, the Malta Times reported that the tanker went through "a series of explosions," described at the scene as "a massive fireball." Reuters also previously reported that three crude oil tankers in the Mediterranean region have been damaged by explosions, with causes unknown.
Ukraine has previously targeted Russia's "shadow fleet." In December last year, Ukraine used a drone in the Mediterranean to hit the Russian-related tanker Qendil, marking the first attack on the shadow fleet outside the Black Sea; Russia also claimed that Ukraine had attacked one of its tankers in West African waters.
Strait of Hormuz paralyzed, US announces escort and insurance plan
The situation in the Strait of Hormuz is equally severe. The Iranian Revolutionary Guard Corps has launched attacks on multiple energy facilities and transit tankers in the Gulf region, causing vessel traffic in the world’s most important oil transport route to drop sharply to zero. Numerous ships are stranded in surrounding waters, forming a “floating parking lot.”
Trump’s escort and insurance plan announced Tuesday is seen by the market as an important signal to stabilize the Strait of Hormuz. However, whether the US government can effectively implement this promise, and Iran’s reaction, remain core variables watched by the market.
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