Trump's deadline looms but Asian nations already have deals with Iran

Nations in the region have been keen to reach agreements as their economies are heavily reliant on Middle East energy.

BBC News - Asia
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Trump's deadline looms but Asian nations already have deals with Iran

Trump's deadline looms but Asian nations already have deals with Iran

9 hours ago

Osmond ChiaBusiness reporter

Getty Images Indian vessel 'Nanda Devi' carrying liquefied petroleum gas arrives at Vadinar Port in the Jamnagar district of Gujarat state Getty Images

An Indian tanker that passed through the Strait of Hormuz

On Monday, US President Donald Trump threatened to take out Iran "in one night" if it failed to agree a deal by 20:00 Washington DC time on Tuesday (00:00GMT Wednesday) to reopen the Strait of Hormuz.

But even before his latest threat some countries had secured deals with Tehran for their vessels to use the key shipping route.

The critical route has become a global flashpoint after Tehran retaliated to US and Israeli airstrikes by threatening to attack ships in the strait.

Oil prices have surged since the disruption to shipping in the narrow waterway, through which a fifth of the world's energy shipments usually transits.

Last week, Trump said the US did not need the Gulf's oil. He has repeatedly urged countries reliant on the region's energy to send warships to the strait and to take the lead to ensure shipments can resume.

In recent weeks - several Asian countries including Pakistan,India and the Philippines - have made agreements with Tehran to letsome ships pass through the strait safely. China has also acknowledged that their vessels have also used the channel.

Questions remain over the scope of these assurances and just how lasting these agreements with Iran will be.

We still don't know whether the guarantees apply only to some ships or all vessels flagged under a certain country, said Dimitris Maniatis from shipping consultancy Marisks.

Nevertheless, countries that need the Gulf's energy are now recognising that they must engage with Iran if they want to resume shipments, said Roc Shi from the University of Technology Sydney.

The fruits of diplomacy

The Philippines is the latest nation to strike a deal with Iran.

Iranian officials assured the "safe, unhindered and expeditious passage" for Philippines-flagged ships through the waterway, said Theresa Lazaro, the South East Asian country's foreign affairs secretary.

She said the agreement - reached after "a very productive phone conversation" with Tehran on Thursday - was "vital" in helping to ensure energy and fertiliser supplies.

There remains uncertainty over Tehran's claim that the strait is open to all countries except the US and its allies, said Roger Fouquet from the National University of Singapore's Energy Studies Institute.

The Philippines, often seen as a US ally, is an interesting case that could suggest that Iran is "willing to compartmentalise", he said.

"Iran appears to be distinguishing between a country's alliance and its active participation in the conflict."

Other countries have also held talks with Iran.

Pakistan announced on 28 March that Iran has agreed to let 20 of its ships pass through the Strait of Hormuz.

"This is a welcome and constructive gesture by Iran and deserves appreciation," said Pakistani Foreign Minister Ishaq Dar. "Dialogue, diplomacy and such confidence-building measures are the only way forward."

Iran has openly welcomed India-flagged ships crossing the strait.

"Our Indian friends are in safe hands, no worries," the Iranian Embassy in India posted on X last week.

The embassy was responding to another post by its offices in South Africa saying that "only Iran and Oman" will decide the future of the Strait of Hormuz.

India's foreign minister Subrahmanyam Jaishankar told the Financial Times in March that the passage of its tankers was the result of diplomacy.

China, the biggest buyer of Iranian oil, also confirmed last week that some of its ships had crossed the strait, although it did not mention Iran or give more details on the vessels.

"Following coordination with relevant parties, three Chinese vessels recently transited the Strait of Hormuz. We express our gratitude to the relevant parties for the assistance provided," a foreign ministry spokeswoman told reporters.

Vessel-tracking data show that despite the war millions of barrels of US-sanctioned Iranian oil have been delivered to China in recent weeks.

What we still don't know

It is uncertain under what conditions some ships have negotiated safe passage - and whether they paid to cross the strait.

Over the weekend, a Japanese vessel carrying liquefied natural gas passed through the Strait of Hormuz, shipping firm Mitsui OSK Lines told the BBC.

"The safety of the vessel and all crew members have been confirmed," said the company, without commenting on whether any tolls were paid and how the crew secured safe passage.

In March, Malaysia also said some of its tankers have been cleared by Tehran to pass through the strait, with Prime Minister Anwar Ibrahim thanking Iran's president for facilitating the passage of its vessels.

Anthony Loke, Malaysia's transport minister, credited "good diplomatic relationship with the Iranian government", local media reported.

It is unclear if other Malaysian-flagged vessels will be granted the same assurances.

Roughly two-thirds of Malaysia's oil imports come from the Gulf.

The implications of these deals for other countries are still uncertain. For instance, whether other countries would switch their flags to those of countries being allowed to pass though.

Many tankers currently carry the flags of countries such as Panama and the Marshall Islands, which have not secured assurances of safe passage, Maniatis said.

Energy economist Shi noted, however, that while these agreements mark a "diplomatic breakthrough", it is not a resolution to the problem.

It is still unknown just how lasting these assurances will be and how military operations in the region will impact them, he said.

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