Commercial traffic through the Strait of Hormuz was nearly at a standstill on Monday, after the strategic waterway reopened briefly over the weekend only to close again. This highlights the significant challenges in restoring shipping activity through the strait.
A seven-week conflict in the Persian Gulf has drastically reduced transit volumes through the Strait of Hormuz, as Iran tightens its control over the passage in retaliation for attacks by the US and Israel. Last Friday, announcements from Iran and the US about the strait's reopening raised hopes that the transit blockade might be broken, causing oil prices to plummet and triggering a rush of vessels towards the waterway. However, the situation quickly deteriorated.
On Sunday, the US Navy seized an Iranian cargo vessel near the port of Jask, Iran, in the Gulf of Oman. The ship was en route to the Strait of Hormuz. This action increases risks for shipowners operating in the region and expands the area considered a navigation risk zone. Oil prices surged in response, indicating that the historic supply crisis appears likely to persist.
"The volatility of the situation will lead most, if not all, shipowners to adopt a cautious 'wait-and-see' approach," said Ivan Mathews, Head of Asia-Pacific Analysis at Vortexa.
The product tanker "Nova Crest" is currently located south of Larak Island, moving away from the Strait of Hormuz into the Gulf of Oman. The vessel is sanctioned by the UK, EU, and Switzerland for its involvement in Russian oil trade. Its listed destination is the port of Khor Fakkan in the UAE.
A sanctioned liquefied petroleum gas (LPG) carrier, the "Axon I," is moving from Fujairah into the Strait of Hormuz, with its destination listed as Sharjah, UAE. Nearby is the medium-range tanker "Starway," which shows its next port of call as Hamriyah in the UAE.
Following the apparent reopening of the Strait of Hormuz, several liquefied natural gas (LNG) carriers had also approached the waterway but ultimately turned back or remained stationary awaiting clearer developments.
A fragile US-Iran ceasefire agreement is set to expire on Tuesday. It remains unclear whether the truce will be extended or if US and Iranian officials will hold a new round of talks later this week in Islamabad.
Comments