Strait of Hormuz Faces Severe Disruption Amid Ongoing Conflict
Just a trickle of cargo ships and tankers, primarily Iranian, have managed to navigate the Strait of Hormuz since the onset of hostilities in the Middle East. Following US-Israeli strikes on Iran that began on February 28, Iranian forces have effectively blocked this crucial maritime trade route. Recent data reveals that shipping traffic has plummeted, raising concerns about global oil supply and trade stability.
Significant Decline in Shipping Traffic
According to analytics firm Kpler, from March 1 to March 23, only 138 vessels crossed the 167-kilometer (104-mile) strait, marking a staggering 95 percent decrease compared to peacetime levels. Among these crossings, 87 were oil and gas tankers, with over half carrying full loads. Most of these vessels were headed eastward, indicating a shift in trade patterns due to the ongoing conflict.
Shipping intelligence journal Lloyd’s List reported that the situation remains dire, with significant disruptions continuing to affect traffic through the Strait of Hormuz. Richard Meade, the journal’s editor, noted that bulk carriers, tankers, and container ships constitute the majority of the maritime traffic. However, there has been a slight increase in gas carriers navigating the strait recently, suggesting some adaptation to the new conditions.
Emergence of a New Shipping Route
On March 23, three additional vessels successfully traversed the strait, including two Indian-flagged tankers carrying liquefied petroleum gas (LPG) and a Panama-flagged oil carrier bound for China. The Indian tankers, Jag Vasant and Pine Gas, each transported approximately 45,000 metric tonnes of LPG, having loaded in the UAE and Kuwait. The Bright Gold, carrying around 40,000 metric tonnes of methane, is expected to arrive in China by April 13.
These vessels reportedly utilized a newly established route approved by Tehran, navigating around Larak Island off the Iranian coast. Meade indicated that countries such as China, India, Pakistan, Iraq, and Malaysia have been in direct discussions with Tehran to coordinate vessel transits with the Iranian Revolutionary Guards. Notably, at least nine ships have already passed through this Iranian-approved corridor, with some vessels maintaining their AIS transponders—an unusual move for non-Iranian ships in the current climate.
Strait of Hormuz Faces Severe Shipping Decline Amid Ongoing Conflict
Sanctions and Oil Trade Dynamics
The majority of vessels transiting the Strait of Hormuz are owned or flagged by Iran, followed by Greek and Chinese carriers. Bridget Diakun, an analyst at Lloyd’s List Intelligence, highlighted that while Iran continues to control the strait and export its oil, other shipping activities remain largely stagnant.
An analysis by AFP revealed that over 40 percent of the ships passing through the strait since the conflict began are under US, EU, or UK sanctions. Among the oil and gas tankers, nearly 59 percent are also sanctioned. Diakun noted that since March 16, the traffic heading westbound has primarily consisted of shadow fleets, gas carriers, and tankers.
Commodities analysts at JPMorgan have observed that nearly all oil traffic through the strait is Iranian, averaging 1.3 million barrels per day in early March. With a fifth of the world’s oil and liquefied natural gas typically passing through this vital chokepoint during peacetime, the ongoing disruptions pose significant risks to global energy markets.
