Much has been written about the effects of the current hostilities in and around Iran. The title of this FT article - Iran conflict turns shipping market into ‘wild west' - has echoes of much that has been written about the impact on the shipping industry, employing rhetoric that suggests that carriers (and other shipowners or insurers) are seeking to disregard the legal position and their obligations under contracts, or otherwise profit from a situation that has serious human and commercial consequences. 

The bulk of the article is more measured, but in any event, our experience suggests otherwise. It is certainly the case that some carriers will have taken the decision to deliver cargoes other than to the intended port of destination, however any such decision will not be taken lightly and will be in full consideration of the dangers of the current crisis, both to their crew and to their customers - seeking to ensure that their customers receive as close to contractual performance as is possible in all the circumstances. That will inevitably come with additional cost to all sides. 

While there will always be those that seek to (and will) profit from geopolitical shocks, it is, more often than not, within the confines of the applicable legal structures and with an eye to the fact that the industry is relatively small and counterparties will likely remember those that have sought to exploit a temporary window of opportunity to others' detriment. 

For further insight on the impact on the shipping sector, please see our latest bulletin on Iran Update: Impact on Liner Clients.