Alexandros Josephides: Cypriot shipowners are concerned about the Strait of Hormuz

While the world is watching the escalation of tension in the Middle East following the US involvement in the military conflict between Israel and Iranwith bated breath, the Iranian Parliament's decision in principle to close the Strait of Hormuz has raised alarm bells in the global economy against the backdrop of the painful consequences of such a development.

With approximately 20% of global oil and gas cargo passing through the Strait of Hormuz, its possible closure, as the Director General of the Cyprus Shipping Chamber (CSC), Alexandros Josephides, indicated in a statement to InBusinessNews, would create a huge problem in the supply chain and an oil crisis of enormous proportions.

As Josephides explained, this will have an unimaginable impact on container management; however, cargo movement and supply to the global oil and natural gas market will be affected to a greater extent.

This would mean that impacted countries, as he further pointed out, would have to find alternative sources of oil and natural gas imports.

The side effects on shipping

Regarding the side effects on shipping, according to the Chamber’s Director General, there will be enormous disruption in the sector, since shipowners will try to avoid having their ships stranded in the area and, those who can, will try to route them in other directions.

Regarding Cypriot shipping and the economy in particular, Alexandros Jospehides pointed out that it will be affected to the extent that there are Cypriot ships in the region or ships managed by Cyprus and which will be forced to review their approach to the region so as not to be trapped.

"There is concern, a huge concern among Cypriot shipowners," he pointed out, emphasising that "for the protection of ships, their cargo and crews, those who can avoid the area will avoid it so that the ships are not trapped."

When asked more about this, Josephides clarified that there are no alternative sea routes for ships to follow, since it is the only way to access the region's oil supplies. "Otherwise, the supply of fossil fuels will have to be carried out from another region," he indicated.

The consequences of a blockade

Referring to the implications of a potential blockade of the Strait of Hormuz, the Director General of tChamber presented a clear picture:

"It will unimaginably affect container management, but to a greater extent the movement of cargo and the supply to the global market of oil and natural gas, which are supplied by oil-producing countries in the region, such as Saudi Arabia and the United Arab Emirates," he said.

"So," he added, "countries like China, which is the largest oil importer in the world and which is heavily dependent on the region, I think, will be greatly affected and will have to find alternative sources of oil and gas imports."

(Source: InBusinessNews)