[Freight Weekly] Iran's Forces Seize Vessel in Strait of Hormuz

😶‍🌫️Iran’s seizure of MSC Aries adds an ominous dimension to the trade crisis in the region; Indian maritime trade bottlenecks😶‍🌫️

On April 13, Iran announced that it had seized a Portuguese-flagged merchant vessel, the MSC Aries, at the mouth of the Persian Gulf. Now, entire loads to Northern Europe from India — along MSC’s Himalayan Express (HEX) — are now stranded. This complicates the regional trade crisis. What you need to know:

• Iran accuses the merchant ship and its crew of being “linked to Israel.” The accusation comes after Iran attacked Israel as retaliation for the controversial invasion of the Gaza Strip mired in human rights concerns.

• MSC Aries is currently under a long-term charter agreement managed by Zodiac Maritime, a London-based company. Aries runs on MSC’s HEX.

• MSC leases the Aries from an affiliated firm to Zodiac Maritime. Zodiac is owned by Israeli-born billionaire Eyal Ofer through Ofer Global.

• Iran is threatening to close the crucial shipping route through the Strait of Hormuz, at the mouth of the Persian Gulf, which is critical to maritime trade for Western partners in the region — like Kuwait and Saudi Arabia.

• Iranian-backed Yemen-based Houthi rebels have been molesting trade through the Gulf of Aden and the Red Sea as a sign of solidarity with the Hamas militants Israeli forces said prompted the invasion of Gaza.

• U.S. President Joe Biden called for the crew to be freed. The crew is made up of Indian, Filipino, Pakistani, Russian, and Estonian nationals.

• Indian officials say the 25-person crew will be held by Iranian officials. In a public statement on April 14, the Indian Ministry of External Affairs called for “immediate de-escalation” and the “exercise of restraint.”

Bottom line: The seizure of the MSC Aries is the latest in geopolitical flashpoints related to Israel’s invasion of the Gaza Strip, which has impacted international trade in the region. Such tumult will continue to drive global shipping costs.

CONTEXT: Iran Sanctions, Ukraine On Agenda At G7 Meet In Capri - AFP via Barron’s, April 17, 2024.

Quote of the Day: Will negotiations prevail in the resolution of the Aries crisis?

"I can confirm the ITF has been in touch with family of the crew on board MSC Aries – who have reported today they're safe and being treated reasonably…We continue to call on the Iranian authorities to urgently release the crew and the vessel."

- Steve Trowsdale, International Transport Workers' Federation inspectorate coordinator, in a statement to Reuters, April 17.

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