The US/Israeli attack on Iran dramatically increases the security risk to ships operating in the Persian Gulf and adjacent waters. Ships with business connections to US or Israeli interests are more likely to be targeted, but other ships may also be targeted deliberately or in error.

Read also: Red Sea Shipping Hopes Derailed After Strikes on Iran

Ships already in the area are expected to seek refuge in territorial waters of neutral States in the area such as United Arab Emirates or Qatar, and some ships may also want to try to leave the area entirely. Ships underway to the immediate conflict area are likely to stay away until the situation stabilises again.

We expect insurance rates to increase manyfold, and ships with business connections to US or Israel approaching the area are probably not going to be able to get insurance.

The Iranian naval forces have capabilities designed to disrupt shipping in and out of the Persian Gulf. In the short term it is assessed that Iran will be able to coerce commercial shipping to decide against entering the conflict area.

It is assessed that within few days US air and naval superiority will eventually establish a level of security which will enable commercial shipping to resume transportation in and out of the Persian Gulf and adjacent waters.

The Houthis are allies of Iran and may well decide to ramp up attacks against commercial shipping in the Red Sea and Gulf of Aden. This will constitute a considerable security threat especially to ships with commercial ties to US and/or Israel. Other ships may also be targeted deliberately or incidentally. Following the previous Houthi campaigns against commercial shipping, maritime traffic through the Red Sea is far from pre-conflict levels. The current outbreak of hostilities exacerbates security threats to ships in the Red Sea and Gulf of Aden and will most likely cause some shipowners to reroute south of Cape of Good Hope. Others will still decide to go through in dialogue with their insurers and following a ship- and voyage specific assessment of associated security risks.

The US has established a maritime warning zone in the Persian Gulf, Gulf of Oman, North Arabian Sea, and the Strait of Hormuz to protect against inadvertent targeting of neutral shipping. Commercial shipping is advised to navigate with caution and avoid navigation within this zone, if possible.  This maritime warning zone is not intended to impede neutral or merchant shipping.  Those vessels are free to navigate international waters.  However, the establishment of the warning zone is intended to provide notice that dangerous military operations are taking place from within these locations and the U.S. Navy cannot guarantee the safety of neutral or merchant shipping.

Shipowners assess several factors when assessing security risks to their ships. These factors include the intent, capability, and possibility of an enemy to attack, and the vulnerability and impact to the crew, ship, cargo and environment of different kinds of attacks or security events. In response to this initial assessment the shipowner evaluates the available mitigating measures, which include for example considerations on manning, watchkeeping, damage control readiness, the ship’s routing, and liaison with military forces in the conflict area. The final decision on risk mitigation includes in some cases a decision to stay away completely. This depends on the risk acceptance level of the company and the ship’s crew. The risk acceptance level varies from company to company and is shaped by the company culture.