An expert predicts that Iran will remain committed to its oil tanker hijacks, despite the U.S.'s consideration of imposing additional sanctions.

• At least six vessels have been seized by Iran and its proxies in recent weeks, including the latest oil tanker, the MSC Aries, over the weekend.
• Iran is unlikely to ever shut down the Strait of Hormuz to tanker traffic due to the significance of exporting its oil to China.
• According to Samir Madani, co-founder of Tankertrackers.com, the tankers that are hijacked are likely to be held for a long time because the hijackers want to maintain a state of chaos in the waters.

Over the weekend, Iran seized the containership MSC Aries, making it at least the sixth vessel to be hijacked by Iran and its proxies in response to the Israel-Gaza war. This is adding to the challenges to longstanding freedom of navigation principles that maritime shipping relies on.

Since the seizure of the tanker this weekend, the total number of vessels held by Iran has increased to five, with over 90 crew members still in captivity. Prior to that, the Iranian-backed Houthis had seized The Galaxy Leader on November 19.

Uncertainty is expected to persist for a long time in the shipping and energy sectors due to the latest development.

Samir Madani, co-founder of Tankertrackers.com, stated that Iran is committed to the long-term success of the country.

The MSC Aries, with a carrying capacity of 15,000-TEUs, was identified by Iran as having a link to Israel. Although MSC chartered the vessel, it is owned by Israeli billionaire Eyal Ofer's Zodiac Maritime.

MSC declined to comment.

"Iran has been holding some tankers for about a year, if not longer now," Madani said, stating that he does not anticipate a rapid release or negotiation of a release for the MSC Aries.

The Advantage Sweet, Niovi, and St. Nikolas are also being held in the Khuran Straits, according to Tankertracker information.

In response to Israel's recent attack, Iran has been using the seized vessels as a way to retaliate against the U.S.'s potential imposition of additional sanctions.

According to Madani, Iran has already seized the Kuwaiti oil that was onboard the Advantage Sweet and has been loaded onto their VLCC supertanker the Navarz. Iran took this action as a way to compensate for sanctions.

At the time of the seizure, the Niovi was empty, but the St. Nikolas is filled with a million barrels of Iraqi oil.

On Tuesday, Treasury Secretary Janet Yellen stated that the government might take additional measures to hinder Iran's oil exports, despite U.S. sanctions. In recent years, China has been purchasing significant amounts of Iranian oil, which has helped Iran maintain a positive trade balance.

In 2023, China, the world's largest importer of crude oil, imported 11.3 million barrels per day of crude oil, a 10% increase from the previous year. Iran ranked second in oil exports to China, behind Russia. Customs data shows that China imported 54% more crude oil (1.1 million b/d) from Malaysia in 2023 than in 2022. Industry analysts speculate that much of the oil shipped from Iran to China was relabeled as originating from countries such as Malaysia, the United Arab Emirates, and Oman to avoid U.S. sanctions.

The markets are evaluating the possibility of an escalation in the military conflict between Israel and Iran, which could disrupt the flow of oil through the Strait of Hormuz, where approximately 30% of the world's seaborne oil passes, according to JPMorgan. On Tuesday, oil prices increased due to discussions about potential sanctions.

According to JPMorgan, an Iranian blockade would increase oil prices, but the risk is low because the strait has never been closed off despite Tehran's threats to do so over the past four decades.

Iran cannot close the Strait of Hormuz, but they can inflict substantial harm to energy infrastructure and ships in the region, according to Helima Croft, RBC's head of global commodity strategy and Middle East and North Africa research, who spoke to CNBC on Monday.

"Although Iran may not want to fill their anchorage with ships, they want to maintain a state of chaos in the waters," Madani stated. However, he concluded, "This would ultimately harm their biggest client, China."

According to Andy Lipow, president of Lipow Oil Associates, the closure of the Strait of Hormuz would cause Brent crude oil prices to rise to the $120 to $130 range. This would put a strain on relationships with China and India, who rely heavily on Persian Gulf oil to meet their energy needs.

According to Lipow, Iran may be hesitant to close the waterway due to the potential backlash from Saudi Arabia, Kuwait, and Iraq, who rely heavily on the strait for their oil exports. However, the immediate concern in the oil market is the possibility of an attack by Iran on Israeli territory, which could lead to a counterattack by Israel on Iran's oil-producing and exporting facilities.

The managing director of ClearView Energy Partners, Kevin Book, advises that the markets should monitor sanctions imposed by both the US and UN.

The House of Representatives has added several Iran sanctions bills to its calendar for consideration this week, including new sanctions on Iranian oil exports to China. Additionally, the House is considering 11 bills in response to Iran's attack on Israel.

"The note stated that most, if not all, bills could gain veto-proof bipartisan support, as long as they receive a two-thirds majority of all members present and voting."

The U.N. has been asked by Israel to reinstate multilateral sanctions that were lifted under the Iran nuclear deal, but this can only happen if France, Germany, and the U.K., all parties to the deal, agree. "Many risks are unfolding. The forest is on fire," Book stated.