Oil tanker headed to Houston seized by Iranian Army, expert breaks down how it could impact consumers

Video taken Thursday from Iran's State Broadcast shows the moment masked Iranian Army soldiers dropped on the deck of an oil tanker. 

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The Chinese-owned vessel, Advantage Sweet, was leaving Kuwait and headed to Houston. The agency reported the seizure came after an "unknown ship collided with an Iranian vessel in the Persian Gulf," but the U.S. Navy has not confirmed that, stating the vessel issued a distress call. The 5th Fleet issued this statement: 

On April 27 at approximately 1:15 p.m. local time, Marshall Islands-flagged oil tanker Advantage Sweet was seized by the Islamic Republic of Iran Navy while transiting international waters in the Gulf of Oman. The oil tanker issued a distress call during the seizure. U.S. 5th Fleet is monitoring the situation.

Iran’s actions are contrary to international law and disruptive to regional security and stability. The Iranian government should immediately release the oil tanker.

Iran’s continued harassment of vessels and interference with navigational rights in regional waters are a threat to maritime security and the global economy. In the past two years, Iran has unlawfully seized at least five commercial vessels sailing in the Middle East.

Advantage Sweet is also owned by a Chinese company and managed by Turks. The all-Indian crew was carrying oil from Kuwait, and it was chartered by Chevron. 

Dr. Rick Sindelar, Director of the Center of International Studies at St. Thomas, says Iran could be responding to the recent U.S. sanctions against them. There have been a number of seizures of vessels in the Strait of Hormuz since 2019. Sindelar says about 30% of the oil used in the world travels through those waters. 

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How does this impact Houston? 

"The amount of oil on board one tanker probably doesn't affect the Houston refinery or gas station situation," says Sindelar. "When these (seizures) begin, the world oil market begins to factor in the risk of continuation of this and or factor in the risk of retaliation. About 30% of the oil used in the world comes through the Straits of Hormuz. One tanker may not be much, but if the security situation deteriorates in the Persian Gulf, gas prices will go up because the supply will be hit.

President Biden has yet to respond to the incident. Sindelar says the public should not expect an elaborate statement anytime soon. 

"If you try to rescue the tanker or strike the naval base where the boat came from….anything that risks escalating things in Hormuz, the Iranians might try more stuff. Now the oil flows even worse. So the administration's in a tough spot," says Sindelar.