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Shipping firms shift to land routes as Hormuz disruption cuts Gulf trade volumes

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Major shipping companies are increasingly shifting to overland transport routes as they seek alternatives to the Strait of Hormuz, the Financial Times reported, citing company executives.

Under the new arrangements, companies transport containers to ports in Oman and Saudi Arabia before distributing them across the region by truck.

“The only way to get cargo there, meaning to the Gulf states, is via overland routes… But the capacity of those routes is, of course, far more limited,” Rolf Habben Jansen, chief executive of German shipping company Hapag-Lloyd, said.

Vincent Clerc, chief executive of Maersk, one of the world’s largest shipping firms, also told the Financial Times that the use of alternative supply routes had increased.

“Both Saudi Arabia and Iraq have opened their borders to large numbers of trucks coming from Iraq, Jordan and even Türkiye,” Clerc said.

According to the Financial Times, major logistics companies including MSC, Maersk, CMA CGM and Hapag-Lloyd have redirected vessels to ports in the Gulf of Oman, including Fujairah, as well as to the Saudi Red Sea port of Yanbu.

Containers arriving at those ports are then transported by truck to Saudi Arabia’s Dammam Port, the Iraqi city of Basra and the UAE’s Jebel Ali Port.

Cargo is subsequently shipped from those logistics hubs to its final destinations.

A London-based ship broker, who was not identified by name, said grain traders had also begun using the system. “The volume of grain arriving in Fujairah and Khor Fakkan has increased. Those cargoes are then trucked to the UAE’s major ports before being distributed to Qatar, Bahrain and other Gulf countries by smaller vessels,” the broker said.

Company executives, however, said the alternative land routes could not fully replace the previous cargo flows that moved through the Strait of Hormuz.

Habben Jansen said trade volumes in the Gulf region had fallen by between 60% and 80%.

Freight rates have also risen because of the additional costs involved.

The Financial Times reported that container shipping rates between Shanghai and the Gulf and Red Sea routes had surged to record highs, exceeding even levels seen during the COVID-19 pandemic.

According to Clarksons Research data, the cost of transporting a 20-foot equivalent unit container rose to $4,131 from $980 before the conflict.

Iran said it had halted trade through the Strait of Hormuz following the military operation launched on Feb. 28 by the US and Israel.

Around 20% of global oil trade and more than 30% of liquefied natural gas trade passes through the strait.

Maersk announced on March 2 that it had suspended the acceptance and shipment of refrigerated cargo, dangerous goods and special cargoes bound for Gulf countries following the outbreak of conflict in the Middle East.

The Danish company exempted only the Saudi ports of Dammam and Al Jubail from the measure.

Diplomacy

Türkiye calls for Azerbaijan-Armenia peace treaty, highlights normalization steps with Yerevan

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Turkish Foreign Minister Hakan Fidan has emphasized the normalization process with Armenia while calling for the signing of a peace agreement between Yerevan and Azerbaijan.

The evaluations were made by Fidan during a joint press conference following the 10th Türkiye-Azerbaijan-Georgia Tripartite Foreign Ministers’ Meeting held in Istanbul. Highlighting tripartite cooperation, Fidan emphasized the importance of peace and stability in the South Caucasus. He called for a peace treaty between Azerbaijan and Armenia, while also pointing to the significance of the ongoing normalization process between Türkiye and Armenia.

Hosted by Foreign Minister Fidan, the tripartite meeting was attended by Azerbaijani Foreign Minister Jeyhun Bayramov and Georgian Deputy Prime Minister and Foreign Minister Maka Botchorishvili. Following the meeting, which lasted approximately one hour, the ministers held a joint press conference. Fidan, Botchorishvili, and Bayramov subsequently signed the Istanbul Declaration.

The backbone of Middle Corridor cooperation

During the joint press conference, Fidan emphasized the critical importance of cooperation in the South Caucasus. He stated that the tripartite mechanism between Türkiye, Azerbaijan, and Georgia serves as a guarantee of peace and stability in the region, adding: “The Middle Corridor has become one of the strategic backbones of our tripartite cooperation.”

Pointing out that the world is currently passing through a period of geopolitical fractures in various regions, Fidan said: “Today, as three countries, we have reaffirmed our common will regarding the future of our region, our mutual trust, and the joint vision we have built together. The stronger the cooperation between our countries becomes, the more secure, prosperous, and stable the South Caucasus will be.”

He stated that this cooperation paves the way for peace, stability, and energy supply security through connectivity across a broad geography stretching from Europe to Asia.

In this context, Fidan pointed to the significance of the Middle Corridor:

“Our goal from now on is to build a region that is even more integrated in terms of energy, transport, and communication infrastructure. This integration is also of strategic importance for establishing a more secure, faster, and more predictable transit route between Europe and Asia. The most concrete point this objective has reached today is the strengthening role of the Middle Corridor. The Middle Corridor has become one of the strategic backbones of our tripartite cooperation. In this framework, the ceremony held on the Georgian section of the Baku-Tbilisi-Kars railway line on June 2, marking the line reaching its full capacity, was an important milestone. We aim to provide more added value to our region by utilizing this strategic line to the maximum extent.”

Call for a peace agreement between Azerbaijan and Armenia

Addressing the framework of security and stability in the South Caucasus, Fidan called for a peace treaty between Azerbaijan and Armenia.

“We support the peace process between Azerbaijan and Armenia. We demand that Azerbaijan’s legitimate concerns be addressed and that the peace agreement be signed,” Fidan said.

Emphasis on normalization with Armenia

Fidan pointed out that the normalization process Türkiye is conducting with Armenia continues, stating that “as connectivity strengthens, the social foundation of peace will also strengthen.”

Fidan described the process as follows: “The normalization process we are carrying out with Armenia continues in the same manner, in close coordination with Azerbaijan. Significant progress has also been made over the past four years. In our view, the primary opportunity and goal facing the South Caucasus is this: as the ground for peace strengthens, connectivity projects will yield even stronger results, and as connectivity strengthens, the social and economic foundations of peace will be established on firmer ground. We are determinedly continuing our efforts to reinforce this cycle, which will serve the common interest of the entire region.”

Call for diplomacy in Iran and Ukraine conflicts

Fidan also shared evaluations regarding the conflict involving Iran, stating:

“Despite this positive outlook toward establishing peace in the South Caucasus, the security environment surrounding us continues to harbor serious risks. In this context, the peace talks conducted between Iran and the US were also on our agenda at today’s meeting. It is essential to leave behind this war, which has brought our region and the world to the brink of disaster. Within this framework, we are continuing our contacts with both the US and Iran to ensure a lasting peace, while also working in close consultation with regional countries. Türkiye will continue to support diplomacy and dialogue during this critical period.”

Pointing out that the ongoing Russia-Ukraine war also threatens regional security, Fidan continued:

“We view reaching peace in the Russia-Ukraine War as essential for the stability and security of our region. We believe that the diplomatic process and peace-oriented efforts must be maintained with determination. We are all watching the current stalemate on the battlefield and in the diplomatic process with concern. Unfortunately, the steps taken by the parties to turn this stalemate to their advantage are further increasing tensions on the ground. Recent attacks in the Black Sea and the Azov Sea are bitter examples demonstrating how serious the consequences of this danger can be.”

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EU authorizes Mediterranean naval mission to intercept suspected Russian shadow fleet tankers

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European Union member states have authorized military vessels operating under the Mediterranean naval mission, Operation IRINI, to board and inspect foreign oil tankers suspected of being part of Russia’s “shadow fleet.”

The decision was announced by Kaja Kallas, the EU High Representative for Foreign Affairs and Security Policy.

Operation IRINI—named after the Greek word for “peace”—is a military maritime mission launched by the European Union in 2020. The primary objectives established at its inception were to enforce the United Nations arms embargo on Libya using aerial, satellite, and maritime assets, combat oil smuggling, and prevent human trafficking.

The operation conducts its activities in the central Mediterranean.

Kallas detailed the policy shift in statements made ahead of an informal meeting of EU defense ministers in Cyprus.

According to statements released by the European External Action Service (EEAS) press unit, Kallas said: “We will also discuss the shadow fleet. Our Operation IRINI has changed its rules of engagement and now allows for the seizure of vessels. The aim is to change the field practices of different countries regarding interaction with these vessels, because this situation genuinely poses a danger.”

The 20th sanctions package adopted by the European Union this spring includes prohibitions on maritime services associated with Russian oil and imposes restrictive measures on tankers.

Estonian Foreign Minister Margus Tsahkna stated that the new package of measures also foresees the possibility of introducing a complete ban on the maritime transit of Russian energy resources.

The Moscow administration, conversely, characterizes the sanctions as illegal. Russian officials have previously issued warnings that retaliatory measures would be taken if military assets are deployed to seize vessels.

In a statement released at the end of March, the Russian Ministry of Foreign Affairs asserted that EU countries were engaging in “piracy on the high seas” under the pretext of the “shadow fleet” term by stopping vessels they believe to be associated with the transport of Russian cargo and redirecting them to their own ports. The ministry pointed out that no such concept exists in international maritime law.

Nikolay Patrushev, Assistant to the President of the Russian Federation and Chairman of the Maritime Board, also stated that European Union countries fabricated the concept of a “shadow fleet” to engage in piracy along maritime trade routes.

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Armenia election: Pashinyan claims victory with near-majority as opposition alleges power usurpation

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Armenia held elections for the National Assembly on June 7. Following the opening of all ballot boxes, data released showed that the ruling Civil Contract Party, led by Prime Minister Nikol Pashinyan, secured 49.81% of the vote.

Pashinyan declared victory for his party before the votes were fully counted, a move that former President Robert Kocharyan characterized as an attempt to usurp power.

Armenia is governed under a parliamentary republic system, in which the head of government is determined by the parliamentary majority and the prime minister forms the cabinet.

Elections for the unicameral National Assembly are held every five years under a proportional representation system. Political parties must secure at least 4% of the vote to enter parliament. This threshold is set at 8% for alliances consisting of two parties, and 10% for coalitions comprising more than two parties.

Under the Electoral Code of Armenia, a single political force must hold at least 52% of the parliamentary seats to form a government independently.

The elections took place during a period of shifts in the country’s foreign policy trajectory. While Prime Minister Nikol Pashinyan aims for Armenia’s accession to the European Union (EU), a law titled “On the Launch of the Process of Accession of the Republic of Armenia to the European Union” was adopted in the country one year ago.

A total of 18 political forces competed in the elections. Among these forces, alongside the ruling Civil Contract Party, was the Armenia Alliance led by Robert Kocharyan.

The Armenian Revolutionary Federation (Dashnaktsutyun) and the Reborn Armenia parties are included within this alliance. Two other forces contending for seats in parliament were the Strong Armenia Alliance, which brings together the party of the same name alongside the New Times and United Armenians parties, and the Prosperous Armenia Party, led by businessman and billionaire Gagik Tsarukyan. The Strong Armenia Party is led by Armenian-Russian businessman Samvel Karapetyan, who is the president of the Russia-based Tashir Group of Companies.

According to a report by News.am, which cited preliminary data from the Central Electoral Commission of Armenia, the Civil Contract Party ranked first with 49.81% of the vote, receiving 727,160 votes after all ballots were processed.

The Strong Armenia Alliance finished in second place with 340,062 votes (23.29%), the Armenia Alliance came third with 145,097 votes (9.94%), and the Prosperous Armenia Party completed the election in fourth place with 58,368 votes (4%).

Incumbent Prime Minister Nikol Pashinyan declared victory for his party when less than 20% of the votes had been counted. Pashinyan stated that the Civil Contract Party would form the government alone.

Asserting that his party received the votes of more Armenian citizens this time compared to the 2021 elections, Pashinyan stated during a press conference that opposition leaders Karapetyan, Kocharyan, and Tsarukyan should be held criminally responsible.

According to a report by Armenpress, Pashinyan characterized these figures as “representatives of the criminal-oligarchic system” and a “three-headed spy party of war” that must be eradicated.

Pashinyan also added that Armenia intends to maintain its course toward EU accession, but will nevertheless preserve its participation and membership in the Eurasian Economic Union (EAEU) and continue to develop relations with Russia.

Former President Robert Kocharyan evaluated Pashinyan’s declaration of victory before the election results were finalized as an attempt to pressure the Central Electoral Commission and usurp power.

In his statement on the matter, Kocharyan said: “Rather than instructing and threatening the judicial system and state institutions before the final results are announced, the current regime must bear legal responsibility for all election violations recorded during this period, the crude use of administrative resources, and the pressure exerted on the will of the citizens.”

Samvel Karapetyan, the leader of the Strong Armenia Alliance, also stated that the current authorities would not achieve the victory they desire.

Pointing out that Pashinyan declared victory when only 30% of the votes had been counted, Karapetyan stated that these figures represented data from rural areas and that the vote share of the Civil Contract Party would begin to decline as the counting in urban areas progressed.

Karapetyan further noted that the government conducted “special operations” targeting the Strong Armenia Alliance, stating that 75 members of the alliance were detained on election day alone.

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