III Kinetic Conflicts & DefenceMiddle East and North Africa
TRENDS argues the Mecca pact spreads risk but leaves Hormuz uncovered
- Institution
- TRENDS Research & Advisory (Abu Dhabi)
- Author
- Umud Shokri
- Country · language
- UAE (Abu Dhabi) · English
- Affiliation
- UAE-based think tank
Summary
In a piece published by TRENDS on 11 November, energy strategist Umud Shokri distinguishes between two new arrangements. The Mecca Joint Defence Agreement, signed by Saudi Arabia, Türkiye and Pakistan on 7 August 2026, establishes a mutual defence clause and a permanent secretariat in Riyadh. He notes that it provides for no patrols, escorts or naval command. The Saudi-led Multinational Maritime Defence Alliance, by contrast, became operational on 2 September, with a Saudi commander and a Pakistani deputy.
The core of the piece is a coverage gap. The alliance's area of operations is the Red Sea, the Bab el-Mandeb and the Gulf of Aden. Hormuz, which carried about 20 million barrels a day in 2025, lies outside it. Citing Reuters, the author notes that after the US struck three Iranian tankers on 5 September, daily transits through Hormuz fell to 10, and on one day only two ships passed. Saudi Arabia raised loadings at Yanbu from 2 million barrels a day to more than 5 million, but the Houthis declared a blockade on Saudi-linked ships on 20 July.
On insurance, the author gives the following range. The war risk premium for the southern Red Sea, the extra cover charged to ships entering a war zone, rose from 0.3% of hull value to more than 1%. Some Saudi-linked vessels paid 2–3%, and Hormuz at its worst cost 7.5–10%. For a VLCC worth $100–140 million, that can exceed $1 million per voyage. He concludes that the two arrangements redistribute risk but do not structurally reduce it, and that the absence of the UAE and Oman widens the gap.
Blind spot
The piece limits Türkiye's role in the pact to Ankara's offer of technical support and does not examine in depth how NATO membership would bind Türkiye in a Gulf conflict. Premium figures are given as ranges, without period or source. The author holds a post at a US-based university while the publisher is UAE-based; the political reasons for the UAE staying outside the alliance go unexamined.
Talay assessment
Bottom line
The piece shows that the Gulf's new defence architecture has yet to sell anything to the insurance market. The Mecca pact is a political commitment, and the naval alliance is a coordination structure that leaves Hormuz out; the main risk zone, carrying 20 million barrels a day, falls under neither. Even if premiums ease from their 7.5–10% peak, the reason will be US–Iran diplomacy, not these arrangements. As a pact member, Türkiye carries political exposure in a Gulf crisis, while its operational obligations remain undefined.
Likely effects
- War risk premiumsUncertain1–6 months
Because its remit excludes Hormuz, the naval alliance will not directly lower the 7.5–10% peak premiums at the Gulf exit; any effect is likeliest in the southern Red Sea band around 1%.
- Türkiye's external exposureNegative1–6 months
The mutual defence clause signed on 7 August does not define whether an attack on a merchant ship or port counts as a trigger, leaving Ankara under an open-ended commitment.
- Red Sea routeNegativeWeeks
Yanbu loadings above 5 million barrels a day have moved risk from Hormuz to the Red Sea; while the Houthis' 20 July blockade holds, the shift relocates risk rather than removing it.
Possibilities, ranked
- 1Coordination body persists, premiums hold55%
The alliance stays limited to information sharing and exercises, with no escort commitment; Red Sea premiums do not fall below the 1% band.
Watch: Whether the naval alliance announces an escort or patrol schedule; updates to the Lloyd's Joint War Committee listed areas
- 2Alliance gains operational capacity30%
Members announce sensor, air defence and ship contributions, and the 2–3% premium on Saudi-linked vessels starts to ease.
Watch: Concrete force contributions announced by member states and premium quotes for Saudi-linked ships
- 3The pact is tested by an attack15%
Yanbu or a Saudi terminal is struck, and the Mecca pact's mutual defence clause becomes a political test for Türkiye and Pakistan.
Watch: A strike on Yanbu or Saudi Red Sea ports and a statement from the Riyadh secretariat
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Original publication: trendsgroup.org · 12 November 2026
This page summarises the institution's view and does not reflect the view of Talay Insight. No direct quotation is used.