Commercial vessel traffic through the Strait of Hormuz virtually halted on Monday after a brief and disorganized weekend resumption that ended with the first US seizure of an Iranian vessel – highlighting how difficult it will be to restore movement in this vital strait, Bloomberg reports, writes UNN.
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Transit traffic through this waterway has shrunk to a minimum during seven weeks of war in the Persian Gulf, as Iran tightens control in response to US and Israeli strikes. On Friday, it seemed this paralysis was over when Iran and the US announced a resumption of traffic, leading to a sharp drop in oil prices and a rush of vessels to the crossing point – but the situation quickly spiraled out of control.
By Sunday, the US Navy had seized an Iranian cargo ship in waters off the Iranian port of Jask in the Gulf of Oman as it headed for the Strait of Hormuz – the first such move during this US blockade – raising the stakes for shipowners operating in the region and expanding the area considered risky for transit. In response, benchmark oil prices jumped, as the historic supply crisis appears set to drag on even longer.
"The ongoing volatility will deter most, if not all, shipowners from taking a cautious 'wait-and-see' approach," said Ivan Matthews, head of Asia-Pacific analysis at Vortexa Ltd.
As Reuters confirms, on Monday, ships largely avoided the Strait of Hormuz after the weekend escalation, during which Iran made what appeared to be warning shots at vessels, and the US military seized an Iranian cargo ship. Only one vessel reportedly exited the Persian Gulf through the strait, while two entered it within 12 hours, according to ship tracking data on Monday, which is only a fraction of what is typically around 130 vessels per day.
The oil product tanker Nero, which is under British sanctions for Russia-related activities, was passing through the strait, as shown by SynMax satellite analysis and tracking data from the Kpler platform. Two other vessels – the chemical tanker Starway and Axon I, a liquefied petroleum gas tanker under US sanctions for past trade with Iran – were heading into the Persian Gulf.
More than a dozen tankers passed through the strait after Iran briefly declared it open on Friday. But on Monday, the ceasefire between the United States and Iran was jeopardized as Iran vowed retaliation for the US seizure of its vessel and refused to join new peace talks.
On Monday, the US Central Command released a video showing the guided-missile destroyer USS Spruance intercepting an Iranian cargo ship attempting to head to an Iranian port.
The fragile truce between the US and Iran is set to expire late Tuesday. It is unclear whether this truce will be extended.
According to shipping and insurance sources cited by Reuters, war risk insurance premiums, which had begun to fall, have again risen from 2% to around 3% of the vessel's value.
"The past weeks have brought several failed attempts, and while some form of resolution is likely at some point, the timing of any sustained breakthrough remains highly uncertain," shipping broker Clarksons said in a note on Monday.
As Reuters notes, "on Saturday, Iran fired on vessels in the strait, including a container ship owned by CMA CGM," which the French firm confirmed, calling them "warning shots" and adding that the crew was safe.
To cool rapidly rising oil prices, the Trump administration on Friday extended the waiver of sanctions on Russian oil at sea, allowing purchases for approximately one month.
On Monday, oil prices rose by about 5% due to fears that the truce between the United States and Iran could collapse, and as traffic through the strait remained largely halted.
Brent crude futures rose 3.8% to $94.75 per barrel by 13:25 GMT, while US West Texas Intermediate rose 4.0% to $87.82 by 13:29 GMT.
Two days earlier, US Treasury Secretary Scott Bessent stated that Washington would not renew the waiver of sanctions on Russian oil. A similar one-month waiver of sanctions, which allowed Iran to export oil and petroleum products, ended on Sunday.
India, which has been a major buyer of Russian oil while others shunned it after Moscow's 2022 invasion of Ukraine, named three more Russian insurers it will allow to offer marine insurance to shippers. The 11 Russian companies it recognizes are not part of the International Group of P&I Clubs, which provides liability coverage for personal injury or environmental claims for most of the world's tankers.
Shipping in the Strait of Hormuz has almost stopped again after Iran's actions19.04.26, 11:45