Cruise Industry

Will renewed Strait of Hormuz tensions impact Middle East cruise sector?

A resurgence in tensions between Iran and US and UK allies in the Strait of Hormuz is unlikely to impact the Middle East cruise sector based on past experience.

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Tensions in the Middle East between Iran and Western allies haven’t previously disrupted the local cruise sector.

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On Tuesday, August 3rd, it was reported that a bitumen tanker had been boarded by “Iran-backed forces”, with Britain’s maritime trade agency describing it as a “potential hijack”.

The ship was seized near the Strait of Hormuz, the waterway connecting the Arabian Gulf with the Indian Ocean, off the coast of the United Arab Emirates.

Tensions have simmered in the region after an attack last week on an Israeli-managed tanker off the Omani coast killed two crew members and was blamed on Iran by the United States, Israel and Britain.

Iran denied that attack, as well as this latest incident. In 2019, when several oil tankers were attacked in the Arabian Sea with mines, it also denied involvement, although the US and UK both agreed that it was responsible.

Those 2019 attacks ratcheted up tensions in the region, but did not impact the regional cruise sector, primarily because they occurred outside the active months for the winter season, and also because Iran is not considered a threat to civilian passenger ships.

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The Norwegian Shipowners’ Mutual War Risks Insurance Association (DNK), the world’s largest war risk insurer, said the country was a ‘moderate’ threat to passenger ships, indicating a low probability of interference in their operations.

Royal Caribbean, meanwhile, which was scheduled to homeport in Dubai for the 2019/20 cruise season, said it was monitoring the situation at the time, but ultimately did not alter its cruise plans in the region.

MSC Cruises, Costa Cruises and TUI all followed suit, announcing that the maritime incidents had not altered their plans in the region. Only P&O Cruises, a British cruise line, was forced to amend its plans to send a ship to the region, after Iran siezed a British-flagged tanker.

P&O was due to homeport in Dubai that November, and cancelled the cruise season in August, Cunard Line, another British cruise line, was due to call in Dubai in January, 2020, and told Cruise Arabia & Africa the cruise wouldn’t be rescheduled.

The Strait of Hormuz is a narrow passage that connected the Arabian Gulf to the Indian Ocean, all cruises to and from Dubai must transit through it on each itinerary.

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The timing of the latest flare-up in tensions therefore suggests minimal impact on the regional cruise sector. With several months still to go before the 2021/22 cruise season is due to start, cruise lines will be taking a long view on the events before factoring them into their plans.

In the past, even when US-Iran tensions have escalated during the cruise season, it hasn’t affected cruise lines operations.

During the most recent Dubai cruise season, when the US launched a drone strike on Qasem Soleimani, an Iranian Major General in the Islamic Revolutionary Guard Corps, Iran responded with a missile strike on a US base in Iraq.

At the time, MSC Cruises said its cruise season out of Dubai was unaffected.

“We have not received any intelligence suggesting that there is reason for our itineraries to be altered, or shore excursions to be cancelled,” MSC Cruises said in an emailed statement. “Our cruise ships will sail as planned and per schedule.”

Royal Caribbean International issued a similar statement, indicating that its global security assessment team had not deemed the events to represent a threat to cruise ships in the region.

Cruise Arabia & Africa has reached out to the four cruise lines (MSC, Costa, TUI and AIDA) that are due to cruise roundtrip from Dubai for the coming 2021/22 winter cruise season and will update this article when we hear back.

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