Eyes on Salalah

There is a crisis of confidence in the Middle East as renewed escalation threatens to bring global supply lines to a standstill. For the first time, the WTO has sent an SOS, warning that geopolitical tensions, conflict-driven shipping disruptions and sweeping tariffs continue to cloud the outlook for global supply chains and transport costs. This warning needs to be read alongside the IEA's warning that global oil supply and demand are set to fall further due to lack of progress in ending the volatility. Consequently, fuel prices will continue to soar; on Friday, preliminary data showed traffic through the Strait of Hormuz had dropped to just seven vessels a day. Likewise, the plot is thickening as the Houthis close in on the strategic Perim Island at the mouth of Bab El-Mandeb, effectively choking Saudi Arabia's oil exports on both flanks of the Red Sea. This necessitates sustained diplomacy in the face of the whims and wishes of forces bent on furthering the conflict. The silver lining is that the Omani port city of Salalah is scheduled to host the foreign ministers of Iran and the Gulf states on Monday to secure a 'buy-in for a temporary deal' to manage shipping through the Strait of Hormuz. Oman deserves commendation for bringing all regional stakeholders together for a meaningful dialogue. It is widely hoped that Tehran's influence over the Houthis could help de-escalate the situation. Encouragingly, the Yemeni militia has promised not to obstruct navigation, and the US has refrained from widening the scope of conflict over Yemen. Any upcoming Salalah declaration must serve as a source of consolation for all, anchoring a commitment from the warring sides to end hostilities immediately. Ensuring an uninterrupted navigation of commercial vessels is a must to save the world from another recession. Last but not least, President Trump's rhetoric on the eve of the midterm elections and the matching rejoinder from the IRGC to push on with the war are self-serving exercises detrimental to the prospects of collective security. It is time to put an end to this narrative of madness.