Iran strikes Hormuz 'shuttle tankers,' hitting vessel operated by Korea's Janggeum Merchant Marine

Iran's attack on so-called shuttle tankers — vessels that had been braving the Strait of Hormuz to ferry crude oil despite the dangers — has thrown the Middle East's oil supply network into crisis.

The Wall Street Journal reported Tuesday (local time) that Iran struck three very large crude carriers passing through the Strait of Hormuz in the early hours of that day, two of which were engaged in shuttle operations. The attacks shattered a widely held assumption that shuttle tankers were relatively safe from Iranian strikes.

Since Iran blockaded the Strait of Hormuz in March, only a handful of shipowners had been willing to send tankers through the waterway. Shuttle tankers had taken on the role of loading crude from Gulf oil producers, transiting the strait and delivering the cargo to the UAE port of Fujairah and Oman's port of Sohar.

That arrangement allowed tankers from around the world to collect crude at those ports without having to pass through the strait themselves.

According to S&P Global Energy, about 3.5 million barrels of crude per day have been moved out of the Strait of Hormuz this month through shuttle operations and transshipment — roughly a third of the total volume transiting the strait daily.

Shuttle tankers maximized transport efficiency by making repeated round trips with minimal turnaround time, and many operated under escort from US Navy fighter jets.

What began as a small-scale operation in April had gradually evolved into a sophisticated logistical effort that helped cushion the worst of the shock to energy markets. The Iranian attacks are now expected to severely curtail those operations.

The tanker Mombasa B, struck Tuesday and in which one Indian crew member was killed, had completed four shuttle runs under contract with UAE state oil company ADNOC.

The Wall Street Journal said the vessel belongs to a fleet controlled by South Korean shipping company Janggeum Merchant Marine, known internationally as Sinokor.

Janggeum Merchant Marine acquired dozens of tankers in late last year after securing financing from a co-founder of global shipping giant MSC. When the war broke out, the company deployed the vessels to the Gulf and has been working closely with ADNOC.

Citing people familiar with the matter, the Wall Street Journal reported that executives at Janggeum Merchant Marine and MSC fear Iran's Islamic Revolutionary Guard Corps will continue attacking their ships to paralyze shuttle operations. At least two captains have reportedly refused to transit the strait in recent days.

Shipping industry officials told the paper that the death of a crew member has left those involved in the operations — including captains — gripped by fear, and that a growing perception has taken hold that even US military escorts can no longer guarantee safety.

The threat level has risen further because Iran used cruise missiles in the attacks — weapons faster than drones that leave little time to respond and carry far greater destructive power.

Adding to the alarm, one of the targeted vessels, the Stolt Magnesium, was struck in waters off Oman roughly 500 kilometers from the Strait of Hormuz, raising fears that Iran's strike range is expanding well beyond the strait's immediate vicinity.

"Both the normal transit route and the shuttle service are now under threat," said Richard Matthews, head of research at shipbroker E.A. Gibson. "This is a very significant development not just for the oil market but for the shipping market as well."