Contrary To Reports, Iranian Ships Have Not Passed Into Mediterranean... Yet
Refuting reports that the two Iranian warships had passed the Suez Canal into the Mediterranean, Suez Canal officials said that the ships are not to sail through until... tomorrow (when international FX markets are open at half volume mast). Previous reports on Iran's Arabic language state
television channel Al Alam TV reported that the ships had passed through
the Suez Canal (as, of course, had Debka). Although in reality a 24 hour difference will likely not matter much. The key aspect is that Egypt has indicated that it will not bend to international pressure when it comes to "canal neutrality" rules - something that will likely not inspire confidence in Egypt. As for the warships, we doubt anyone will to take a real defensive posture - after all as we pointed out previously both of these are over 30 years old, and any escalation would be purely symbolic to further mobilize middle eastern forces, based on "provocation" rhetoric. Look for some fireworks in FX trading overnight and tomorrow when already subdued volumes exagerate the impact of any potentially troubling news headline.
Two Iranian naval ships are due to sail through the Suez Canal to the Mediterranean on Monday, Suez Canal officials said, denying a report from Iran that said the ships had already gone through the waterway.
The vessels, the first Iranian naval ships to sail through the canal since 1979, are due to arrive at the southern entrance to the canal in the Gulf of Suez later on Sunday, the officials said.
Earlier on Sunday, Iran's Arabic language state television channel Al Alam TV reported that the ships had passed through the Suez Canal.
The military, which has been running Egypt since President Hosni Mubarak was toppled on February 11, approved Iran's request to send the ships through the canal, an Egyptian army source said on Friday.
Lastly, it will be interesting to see how the US responds to this development. The next naval update will come on Wednesday. In the meantime, here is how the naval positioning was as of last week. Note the Red Sea blockade at both ends courtesy of the Enterprise and Kearsarge.
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