Hormuz tanker traffic unlikely to return to normal anytime soon despite 2-week truce; here's why
A day after the US and Iran agreed to a two-week ceasefire, maritime experts and analysts are now suggesting that the tanker traffic in the Strait of Hormuz is unlikely to return to normal anytime soon.
US Vice President JD Vance reiterated on Wednesday (local time) that Iran has agreed to open the Strait of Hormuz. However, Tehran has made it clear that the reopening of the Strait would be conditional and subject to coordination with the IRGC (Islamic Revolutionary Guard Corps) and technical limitations.
Additionally, the truce has barely done anything to restore confidence for tankers to pass through the Strait, especially as signs of the ceasefire collapsing linger with Israel ramping up its offensive against Lebanon.
Traffic through Hormuz yet to see meaningful rebound: S&P
S&P Global Market Intelligence said that traffic through Hormuz is yet to see a meaningful rebound, with just four transits recorded on Wednesday, hours after the ceasefire was announced. It added that vessels seem to be making use of the alternative transit route along Larak Island.
According to MarineTraffic, a ship-tracking platform using radio-based AIS, or automatic identification system, over 400 oil-laden tankers and dozens of liquefied petroleum gas (LPG) and liquefied natural gas (LNG) carriers were outside the Gulf and awaiting signals to pass via the Strait.
The report suggests that actual transit volume might be higher than what the data shows, since many tankers have turned off their transponders to avoid potential targeting by Iran, but remain at a fraction of pre-war levels.
Iran refuses to give leverage over the Strait of Hormuz: Windward
Maritime research firm Windward, in a note, said, "Whether Iran will maintain control of Hormuz during talks is unclear, but all signs point to the Islamic Republic refusing to give up its leverage during the two-week period."
It added that toll arrangements, transit conditions, and the legal framework for passage continue to be undefined, a move that has deterred ship owners from passing through this crucial waterway.
Citing Nils Haupt of Hapag-Lloyd, one of the world’s largest shipping firms, the report said that for the shipping industry to return to normalcy is weeks away. “It will take weeks, if not months, to reintroduce the original shipping schedules that we had before the start of the war," he added.
Normalcy yet to be restored in Red Sea, say analysts
According to analysts, Iran-backed Houthis in Yemen disrupted the Red Sea last year, and a ceasefire agreement was announced last January. However, the traffic has not yet returned to normal. The instance provides a reference to how quickly traffic could recover after a potential ceasefire.
Iran's Hormuz 'toll booth' could leave energy markets vulnerable
According to a Reuters report, the Islamic Republic's demand to act as a toll booth keeper for the Strait of Hormuz could leave global energy markets vulnerable and hardwire higher prices for many years. Tehran had also indicated on Tuesday that, under a permanent peace deal, it would seek to charge a fee for ships transiting the strait, which is just 34 km wide at its narrowest point between Iran and Oman.
Hormuz traffic at virtual standstill
Since the ceasefire was announced on Wednesday (IST), only one oil products tanker and five separate dry bulk carriers have sailed, Reuters reported.
The traffic through Hormuz has been at a virtual standstill, with little movement since the US-Israeli war on Iran began on 28 February and sailings averaging a few vessels daily, according to data from Kpler, Lloyd’s List Intelligence, and Signal Ocean.
