Bahrain and Saudi Arabia Ban Iranian Ships

Gulf Agency Company has advised that Bahrain and Saudi Arabia have imposed restrictions on dealing with Iranian vessels or vessels that have recently visited Iran.

Both kingdoms now ban domestic entities from entering into transactions with Iranian flagged vessels, and both have banned Iranian flagged vessels from their ports.

In addition, in Bahrain, no vessel – of any flag state – may enter a Bahrainian port if it has called at a port in Iran for any one of its last three port calls.

Saudi Arabia and Bahrain, largely Sunni Muslim nations, have been moving to sever diplomatic ties with Shiite-led Iran in recent weeks. The Saudis and Iranians are engaged in two proxy wars in the Middle East, one in Yemen and one in Syria.

Saudi courts recently ordered the execution of a well-known Shiite cleric, leading to protests in Tehran and the burning of the Saudi embassy. The Saudis have reacted by shutting down transportation and diplomatic ties, including a ban on flights to and from Iran beginning January 5. 150 direct service flights have been affected. Saudi Arabia is home to many Islamic pilgrimage sites, including Mecca, and the ban has severely hurt Arab regional airlines as the flow of Iranian pilgrims is cut off.

The dispute also affects oil prices, which plummeted Tuesday on fears of a deepening global glut. Goldman Sachs has predicted that Saudi Arabia and Russia will be unable to reach a deal on cutting production, and with sanctions lifted, Iran is already beginning to unload its floating stockpile of crude oil, adding to supply. Iranian-Saudi tensions also lower the prospects of an OPEC price control deal as the two rivals begin a fight for oil market share.