Iran-Israel conflict cuts off Oman’s strategic town

• Khasab close to Iran and UAE
• Trade across Strait of Hormuz halted
• Local traders lose business

The conflict between Iran and Israel has cut off supply lines for local traders in Oman’s coastal town of Khasab in the strategic Strait of Hormuz. 

Police watch the Khasab seafront, and their patrol boats are stopping vessels from sailing towards Iran. 

Located in the Musandam Peninsula in the northern tip of Oman, the town of Khasab is home to about 12,000 people. Local traders rely heavily on its container port for both exports and imports.

Their vessels use the narrow channel between Musandam and Iran to sail to Iranian towns such as Bandar Abbas and the Qeshm Island for exchange of trade. But they also sail, using the same waterway, to the Emirati towns of Ras Al Khaima, Sharjah and Dubai. 

“We import sheep and goats from Iran to Oman. We also re-export the animals to the UAE. Since the Iran and Israel war started, the police stopped us from sailing there. This is taking away a big chunk of our business,” Mohammed Al Fazari, a Khasab-based livestock trader, told AGBI. 

He and his partners have lost about OR45,000 ($117,000) of business since the conflict started, adding that, for a small business, it is causing a lot of hardship. 

Other Khasab traders, who are profiting from US-imposed sanctions on Iran, see their businesses coming to a painful pause. 

“We export watches, electronics and electrical items on a daily basis to Iran but we are turned away by police patrol boats. We have to pay back our suppliers and so far we have no money to do that,” said Kareem Hashim, a wholesaler based in the town.  

Alamy via Reuters

Data from National Center for Statistical Information (NCSI) shows that about 30 percent of the town’s population rely on maritime trades, including fishing and sea cruises, for their livelihood.

Iran has already threatened to block the Strait of Hormuz in an action that would cut off 20 percent of the global crude oil supply that passes through the narrow strip.

Fishermen have also been stopped from venturing further into the water, restricted to only 1km from the shores of Musandam. 

“We are now coming back with only 10 percent of our usual catch. If this goes on any longer, then it will have a serious financial implication to us,” said fisherman Ali Al Fakhri.

It is also forcing sellers to temporarily close their stalls and the unpredictability is causing serious concerns in the usually bustling fish market, which is now almost empty. 

However, tour operators say hotels are seeing a higher number of tourists booking rooms, which is unprecedented in the low season. 

“Three of the hotels near the seafront all have about 60 percent bookings in the last four days, which is not normal, because it is off season now. It is strange to say but they are all coming to see what will happen in this conflict in what may be the second phase of the war,” said Juma Al Hunaidi, a local tour operator. 

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He added that hotel occupancy during the hot summer months between May to August is below 20 percent compared with about 80 percent in the winter season. Most of the tourists to Musandam are Omanis, Gulf nationals and expatriates working in the region. 

Though traders are losing money, tour operators such as Hunaidi are making the most of it, in a conflict that so far has caused infrastructural damages to both sides and the death of civilians.  

The conflict has increased international shipping charges and operators are expected to charge a premium as their insurance and crew costs increase.