Return of the Tanker Wars: US – Iran tensions could get precarious for New Delhi

In 1987, nine years after the Islamic Revolution in Iran overthrew the Western backed government of the then Shah of Iran, Mohammad Reza Shah Pahlavi, tensions between Washington DC and Tehran were at the peak as the Iran – Iraq war entered its final stages. The conflict had also shifted to the Strait of Hormuz, a narrow body of water between Iran, Oman and the UAE, and possibly the most important shipping route for the global oil markets connecting the Middle East to an energy hungry world.

In July of that year, Operation Earnest Will was launched by the then US President Ronald Reagan’s administration, answering calls from the leadership of Kuwait to protect its oil tankers from hostilities directed by Iran. The US decided to change all Kuwaiti oil tanker flags to those of the US, making them operate under the auspice of American protection and providing them safe transit in the waterways of the Strait of Hormuz, Gulf of Oman and the Arabian Sea. The Saudis were roped in to help the US, which established a large fleet of warships for this move along with rapid-action air support provided by USAF F-15 fighter jets in aid to the US Navy and US Marines conducting these maneuvers.

32 years since the ‘tanker wars’ of the 1980s, the Persian-Gulf is witnessing a repeat of the same. Last month, on 12 May, four oil tankers off the cost of the UAE reported “sabotage attacks”, causing damage to the ships. Two of the vessels were from Saudi Arabia, one from Norway and the last one reportedly an oil-storage vessel flagged in Sharjah.

In the same month, a Kuwaiti oil tanker named Bridgeton (operating as SS Bridgeton, under American flag) while being escorted by US warships across the Strait of Hormuz, under pressure of Iranian F-14s in the air, was highlighted by the Iranians as a ship carrying ‘prohibited goods’ and was targeted by a string of mines laid in its path. The mines, deployed by Iranian speedboats launched from Farsi Island, caused significant hull damage to the ship which despite the hit finished its journey. The Iranian regime, led by Ayatollah Khomeini and Prime Minister Mir-Hossein Mousavi pushed a narrative domestically that the hit on SS Bridgeton was a victory against the immense power of the US military. Such attacks on oil tankers of US allies continued on and off. In October, two months later, an Iranian attack on another re-flagged Kuwaiti oil tanker led to another US retaliation, Operation Nimble Archer, in which two defunct Iranian oil platforms, part of the Rashadat oil field, were destroyed for being used as military outposts by the Ayatollah led Islamic Revolutionary Guard Corps (IRGC).

Fast forward to 2019, 32 years since the ‘tanker wars’ of the 1980s, the Persian-Gulf is witnessing a repeat of the same. Last month, on 12th May, four oil tankers off the cost of the UAE reported “sabotage attacks”, causing damage to the ships. Two of the vessels were from Saudi Arabia, one from Norway and the last one reportedly an oil-storage vessel flagged in Sharjah. Most, blamed Iran, which rejected the allegations. Over the past week, a second attack took place in the Gulf of Oman, reportedly targeting two ships, with one owned by Japan, one of the largest importers of crude oil from the Middle East. While Iran denied any responsibility, the US released a video of Iranian speedboats clearing an unexploded limpet mine from the ship.

Source: The Associated Press

The situation between Iran and the US once again stands at a precarious juncture, sending stress in a region already balanced on tenterhooks over the past few months as the administration of President Donald Trump unceremoniously pulled out of the JCPOA nuclear agreement negotiated between the P5+1 (China, France, US, UK and Germany) and Iran. Signed in 2015, the agreement sought to bring an end to tensions around Iran’s nuclear program, one that India also helped in nudging Tehran towards.

However, with tensions high, and possibility of a military confrontation between Iran and the US not off the table, New Delhi finds itself in a potentially precarious situation. The Strait of Hormuz is the home of one of the most critical sea routes for oil transportation, and India being an import reliant economy, specifically from states such as Saudi Arabia, Iraq and Iran, a block on supplies, and a shock in global oil prices, is something the economy can ill-afford at this juncture.

The situation between Iran and the US once again stands at a precarious juncture, sending stress in a region already balanced on tenterhooks over the past few months as the administration of President Donald Trump unceremoniously pulled out of the JCPOA nuclear agreement negotiated between the P5+1 (China, France, US, UK and Germany) and Iran.

More than the supplies themselves, New Delhi has also found itself amidst Trump administration’s Iran obsession, led by National Security Adviser John Bolton’s interpretation of Iran as the world’s most problematic country as far as American national security is concerned, one strongly echoed by Trump as well. The US has applied immense pressure on India to bring down oil supplies from Tehran in an attempt to choke the Iranian economy (the recent bilateral between India and Iran on the sidelines of the Shanghai Cooperation Organization (SCO) summit in Kyrgyzstan was called off). While the Iranians pride themselves of having gamed the sanctions regime for decades, not affecting its economic growth or stability, Tehran’s recent adventures into Syria and the costs of keeping the regime of President Bashar al-Assad protected have caused domestic duress, with President Hassan Rouhani in March of last year even sending out a message to the other Iranian power centers that “we should listen to the people” after wide-spread protests in the country.

Meanwhile, sanctions have seemingly brought down Indian oil imports from Iran to zero. As a reaction to these developments, India has allowed Iran’s Bank Pasargad to open a branch in Mumbai to possibly skirt the sanctions regime by trading in Rupee. However, protecting India’s bilateral with Tehran from US’ ire is a separate issue that has been in play for years. The pressure on New Delhi to reign in Iranian oil was no less under the Obama administration, however the erosion of institutional values in the current US leadership, trade threats and attempts to arm-twist New Delhi have clearly not been well received. However, the reality remains that in a battle of wits, India has much more to lose in not meeting the US half way (or even more) on the issue of Iran while still attempting to maintain its ‘strategic autonomy’ and historical bilateral relations with Tehran. Infrastructure such as the Mangalore refinery in Karnataka was built to cater to the quality of crude produced by Iran, and this project is often offered as an example of India – Iran friendship, and why India needs the oil from there. While geo-strategically this positioning perhaps has mileage, commercial reality remains that at an acceptable cost, it is in fact easier to update the refinery itself to cater to any kind of crude. Fact remains, that since the end of the Irano-Hind shipping company in 2012, the refinery today perhaps stands as one of the last remaining truly commercial monument between the two countries on Indian soil.

India’s immediate challenge in an event of escalation in the Gulf of Oman would be international crude prices, a point that should be driven to Washington DC during Secretary of State Mike Pompeo’s upcoming visit to New Delhi. 

India’s immediate challenge in an event of escalation in the Gulf of Oman would be international crude prices, a point that should be driven to Washington DC during Secretary of State Mike Pompeo’s upcoming visit to New Delhi. The recent visit by Japanese Prime Minister Shinzo Abe to Tehran in an attempt to mediate between Iran and the US, whilst a failure, could be seen as an opportunity by New Delhi by liaising with Japan (and even South Korea and China in the future) to try and pacify tensions in the Persian Gulf. Asian economies, today the largest customers of Middle East’s oil, stand most to lose in a US – Iran conflict via market volatility, and arguably India remains the most vulnerable within this Asian grouping as well. There have been many opportunities for India to play a marginally larger role in the region under the ambit of the global community along with the UN, and perhaps along with Tokyo, protecting these interests today could kill two birds with one stone for its foreign policy as well, if New Delhi does indeed have the appetite to play an ace of spade in its strategic deck of cards.

• International Affairs
• Indian Foreign Policy
• Great Power Dynamics
• India
• USA and Canada
• India-Iran
• Strait of Hormuz
• Tanker Wars
• US-Iran

The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.