Israel and allies remain superior, natural gas prices on the rise because of Iran

Coast of Iran is fully militarized. Iran has a 200-kilometer-wide section in which it can block the Strait of Hormuz and prevent petro-monarchies from exporting oil and gas to Europe. Europe does not have the ability to control this key geographic point, so insurance costs will are likely to increase as it is necessary to prevent the risk of Iran seizing, blocking or damaging ships. 

Iran’s attack on Israel in the night of March 13, with more than 300 kamikaze drones, cruise and ballistic missiles did not produce the result that the Iranian political authorities had hoped for, but it certainly complicated the already tense situation in the Middle East.

Two things remained as a key impression – Israel and its allies showed defensive superiority, and security tensions and the maximally militarized coast of Iran created circumstances for the difficult maritime flow of transport ships and energy sources. This may result in a jump in natural gas prices in Europe! 

At this specific moment, only the United States of America can protect the strategic trade corridors to Europe. Europe is not capable of doing it alone. The biggest challenge of all is the Strait of Hormuz in the Persian Gulf, which is in ’’Iran’s backyard“.

Most of the alternative natural gas transport to Europe has to pass through the Strait of Hormuz and end up in the Gulf of Oman. Iran’s unsafe coastline is complicating the process. It is fully militarized, and there is a 200-kilometer-wide section where Iran can block the Strait of Hormuz and prevent the petro-monarchies from exporting oil and gas to Europe. Europe does not have the ability to sovereignly control this key geographic point, so there will likely be an increase in insurance costs because it is necessary to prevent the risk of Iran seizing, blocking or damaging ships. 

Even if the ship manages to pass through the Strait of Hormuz, it reaches the next strait to the Red Sea, which is up to 20 kilometers wide at its narrowest point and is threatened by Houthi operations. The Houthis are clearly geopolitically engaged in order to shake up Europe’s strategic supply, not only the Persian Gulf, but the whole Asia. The main corridor for this is the Indian Ocean (the Arabian Sea and the Red Sea), and this route can be seen as the lifeblood of trade with Europe. One example of this is the event from 30 years ago when the former Libyan leader Muammar Gaddafi planted underwater mines in the Red Sea, bringing Egypt to the edge of bankruptcy, which at the time was earning over a billion from the Suez Canal. 

Vulnerable freedom of navigation

Is there a way to avoid the Red Sea in this case? There is a way through the Cape of Good Hope to the Atlantic coast of South Africa, but it also has a critical point – the Niger Delta, on the West Coast of Africa, has great chances to become a piracy hotspot in the near future, given its proximity to Somalia. This can threaten the supply, and all of the above affects the travel time and increases the cost of navigation. Therefore, Europe’s strategic supply of natural gas will be quite vulnerable from all aspects, which inevitably leads to an increase in state costs for certain multinational operations that should guarantee freedom of navigation. It is important to emphasize that at this specific moment only the United States of America can protect the strategic trade corridors to Europe. Europe is not capable of doing it alone, no matter how vital it is to secure these roads. The biggest challenge of all is the Strait of Hormuz in the Persian Gulf. Its protection is still under question because it is already in Iran’s backyard, and Iran can threaten freedom of navigation from the coast.

Owing to its defensive strength, as well as America, France and Great Britain, Israel defended itself from an attack that no country could survive.

Iranian bombing fiasco

When it comes to Iran’s attack on Israel, it can certainly be said that Israel and its allies showed defensive superiority over Iran. Israel, thanks to its defensive strength, America, France and Great Britain managed to defend itself against an attack that no country could survive. For example, Ukraine faces two times less missiles in a maximum Russian strike than Israel faced on the night of the Iranian bombing. There were no hits, strategic facilities were protected and Israel has demonstrated its strength, showing that it can defend itself and proving that it is expedient to spend billions on anti-missile defense. John Kirby, the spokesman for the White House for national security rightly said when analyzing the attack that “the ability to prevent widespread damage is a demonstration of Israel’s military superiority and proof that Iran is not the military power it claims to be“.