(Photo Illustration – Money Matters – MetroCreativeConnection)
MORGANTOWN – For the past several days, John Saldanha has been anchored to his computer and MarineTraffic.com.
“And I’ve been on the phone a lot,” he said, “talking to my colleagues.”
Said colleagues suddenly have time to chat.
Their cargo ships and oil tankers that were slated for passage through the Strait of Hormuz aren’t going anywhere – at least for now.
Be it officially or unofficially, the waterway that connects the Persian Gulf to the Gulf of Oman is now shut down. The directive came from Iran’s Revolutionary Guard, following military strikes on the country by joint forces from the U.S. and Israel.
Closing off the aquatic artery, Saldanha said, is significant.
He’s speaking from experience.
These days, he teaches at West Virginia University’s John Chambers College of Business and Economics, where he’s regarded as an authority on global supply chain management. Before his doctorate, he earned his expertise as a Class 2 deck officer in the British Merchant Marine, while serving on Indian red flag ships.
Later, he did work in the region for a number of Norwegian, Italian and U.S. shipping companies.
The vessels lining up next to his were laden with everything from oil to high-end electronics to household products.
They still are, he said.
And that’s the problem.
The Strait of Hormuz, he said, is the only way in and out of the Persian Gulf.
Should Houthi rebels begin bombing in the Red Sea, ships will have to divert and detour around the Cape of Good Hope in southernmost Africa to escape danger. Some companies have already started doing that, he said.
That’s close to 5,000 nautical miles, depending upon which map you may be consulting.
In Saldanha’s former world in the Merchant Marine, the Cape of Good Hope translates to two extra weeks.
Two weeks and thousands of miles mean more fuel expended, on top of rising freight rates and reduced shipping capacity — ripples which consumers in America and the world will have to ride out, likely sooner rather than later.
As of Friday morning, West Texas Intermediate crude oil was trading at more than $85 per barrel, an increase of more than $20 a barrel since the conflict began last weekend, according to auto club AAA.
About 3,200 ships, meanwhile, were sitting idle inside the Persian Gulf.
Of course, the former deck officer said, there’s the inherent danger to ship crews: civilian contractors in all-of-a-sudden war zones who could soon be dealing with missiles, on top of manifests.
David Abruzzino, a former CIA officer who teaches classes in national security intelligence at Fairmont State University agrees – while also offering a hard pragmatic note as it relates to the now-dance of military conflict and global commerce in the Persian Gulf.
“Maritime insurance companies won’t cover ships in a war zone,” he said.
The Associated Press contributed to this report.
