[Gulf Of Oman, Iran (general), Iran] Reduce diplomatic ties

Supply-chain Risk Briefing

1) Summary A diplomatic relations reduction occurred in the Iran-Gulf of Oman region, recording a tension index of -4. This incident on April 16th was reported by 10 media outlets and classified as high grade. This is a geopolitical tension situation that could directly impact Middle Eastern energy supply chains.

2) Supply-chain impact

• Increased natural gas supply instability - Iran holds the world's 2nd largest natural gas reserves, and diplomatic tensions could affect exports
• Rising maritime transport route risks in the Gulf of Oman - major energy transport pathway connecting the Persian Gulf to the Indian Ocean
• Potential for Middle East regional energy premium - expanded price volatility due to geopolitical instability
• Increased need to secure alternative supply lines - pressure on European and Asian importing countries for supply diversification

3) Watch points

• Monitor trends in Strait of Hormuz transit volumes and tanker insurance premium changes
• Iran natural gas export contract performance status and whether additional diplomatic friction occurs with neighboring countries