Egan-Jones Analyzes Rising Threats to Middle East Energy Chokepoints
An Egan-Jones analysis warns that inexpensive missiles and drones are empowering Shiite groups over Middle East oil export chokepoints, threatening global trade and credit markets.
Credit rating firm Egan-Jones has released an analysis detailing increasing threats to strategic energy chokepoints in the Middle East. The report suggests that relatively inexpensive missiles and drones are providing Shiite groups with leverage over critical oil export routes, potentially impacting global trade and credit markets.
The analysis cites recent events, including the Houthi control of Mayun island in the Red Sea and the shutdown of Saudi Arabia's cross-peninsula pipeline following drone attacks. Egan-Jones indicates that a military solution appears unlikely, given reduced appetite for prolonged engagements by the U.S. and its allies.
The firm notes that current Western approaches rely on economic pressure. While Iran's currency has significantly weakened, Egan-Jones cautions that this alone does not guarantee political change. Prolonged curtailment of regional energy exports could prove far more costly, affecting food production and transportation and weighing on the global economy.
Egan-Jones outlines two potential paths forward: a negotiated arrangement for petroleum movement, possibly accompanied by wider nuclear proliferation in the Gulf, or a sustained curtailment of regional energy exports. The latter scenario is identified as significantly more costly for the world economy.