Full transcript
[00:07.5]
Hello, my name is George Chapli. I’m the Senior Regional Analyst for the Middle east and North Africa at Everbridge’s Global Insights team on Wednesday July 8th. US President Donald Trump has stated at the NATO summit in Ankara that the ceasefire with Iran is over leading to severe doubts about the security environment in the Gulf and the future trajectory and near term of the global energy market.
[00:33.4]
Now these statements came after a day of severe escalation in the Gulf. Iran has allegedly struck three commercial vessels transiting the Strait of Hormuz, after Iran has warned them not to use the Omani side of the shipping corridor.
[00:52.1]
In response the US Carried out strikes against Iranian military targets in the southern side of the country and Iran has counter retaliated against targets in Kuwait and Bahrain. Now the issue is that all this military action and the diplomatic messaging is now creating an interlinked escalation cycle where each one is feeding into the other.
[01:21.0]
The two sides are pursuing contradicting aims. Iran is trying to show that it can impose any kind of costs on vessels that are transiting the Strait of Hormuz outside of the zone that it considers its zone of control.
[01:40.8]
And on the other hand the US is trying to show that it can decisively answer to these strikes attributed to Iran and restore deterrents. Now both sides are threatening further strikes in the coming hours and therefore near term escalation is likely.
[01:59.4]
Now that doesn’t mean that the diplomatic path is closed. President Trump has explicitly stated that while the renewed strikes on Iranian targets are likely, the US Is still interested in sitting down with Iran and and negotiating further on reaching some kind of a lasting agreement on the cessation of hostilities, the permanent lifting of sanctions on Iran and access to the Strait of Hormuz and on the Iranian nuclear program.
[02:38.8]
Now the timing of this escalation matters as the U S Iran talks were already suspended due to the ceremonial funeral events that were held in Iran between July 3rd lasting until the 9th of July, for the late Supreme Leader Ali KHAMENEI, the US UN talks were supposed to continue after the 10th of July.
[03:10.6]
So this cycle of escalation should be Barclay C. As a breakdown of the ceasefire framework but also that the sides are trying to reposition and regain some kind of a leverage or increase their leverage ahead of any continued talks.
[03:30.8]
That said, while the diplomatic path remains, viable. It’s severely challenged. In the near term, the likely pathway is more escalation and in the Gulf, and potentially now that the June 17th memorand of understanding between US and Iran is over, there’s also a chance that Israel would renew, hostilities, with Iran.
[03:57.6]
For businesses exposed in the Gulf or having assets, the primary risk is of the kinetic nature both to any vessels transiting the Strait of Hormuz. The primary risk of strikes is continued to be in Bahrain and Kuwait where there are, US Linked, military facilities.
[04:19.4]
But if, the cycle of escalation continues, then the target set may expand to Qatar, Oman, Saudi Arabia, United Arab Emirates, and also as I mentioned, even to Israel. And also, the oil and gas market, exposure, is already creating ripple effects in the global energy markets that are, likely going to continue in the next couple, of days.
[04:55.5]
We at Everbridges Global Insights team are going to monitor the developments closely in the coming hours and days and going to provide updated analysis, in the following days.
