The Strait of Hormuz remained largely blocked on Wednesday, as shipowners try to understand if they can safely transit the vital waterway following a fragile ceasefire between the US and Iran that was announced overnight.
Just three ships were observed leaving the region on Wednesday, according to ship-tracking data compiled by Bloomberg. Some had links to Iran, and the country’s media subsequently reported that passage for tankers will remain blocked after attacks on Lebanon. In normal times about 135 ships cross daily, and more than 800 freighters are stuck inside the gulf, mostly waiting to leave.
While shipowners and insurer groups lined up to welcome the ceasefire, they also warned that more details will be needed to determine if safe transit is possible. Iran has said a precondition of the ceasefire is that its armed forces should coordinate navigation through what is the world’s most important oil channel. Tehran has also been charging a toll of as much as $2 million a transit for some carriers.
Read more: Shippers Rush for Hormuz Insurance After Truce Deal, Broker Says
“Time will tell whether it is a pause or a peace but, in the meantime, it is highly unlikely that trade into the Gulf will simply resume,” said Neil Roberts, head of marine and aviation at the Lloyd’s Market Association. “The region remains at heightened risk with none of the underlying tensions resolved.”
The crew on one vessel reported hearing a warning from Iran that navigation through the strait still requires permission from the Islamic Republic, according to a person with knowledge of the matter, offering a reminder of the uncertainty shipowners are facing.
Even before the report, by the semi-official Fars news agency, that tankers had been blocked, owners publicly and privately were saying it wasn’t clear how transits would work in practice.
A.P. Moller-Maersk A/S, the world’s second-largest container line, said the pause “may create transit opportunities, but it does not yet provide full maritime certainty.” Japan’s Nippon Yusen KK said it was monitoring the situation. Germany’s Hapag-Lloyd AG said it will continue to avoid Hormuz for now but added that the ceasefire was positive.
Bimco, a shipping trade group whose members control almost two-thirds of the world’s seaborne freight capacity, also struck a cautious tone, adding that it was still awaiting details of safe navigation plans from the US and Iran.
“Leaving the Persian Gulf without prior coordination with the US and Iran would entail heightened risk and would not be advisable,” said Jakob Larsen, the group’s chief safety and security officer.
Crew Safety
Those views mirrored private comments from owners with ships in the region.
Several in Asia, the Middle East and Europe said they were calling insurers and security advisors, and had put vessels on standby to transit Hormuz.
How soon flows return to normal will dictate the path ahead for global commodity prices. The waterway, which handles a fifth of the world’s oil and liquefied natural gas, has been all but closed since US and Israeli strikes at the end of February prompted Iran to tighten its control, triggering an unprecedented oil-supply crunch.
Throughout the conflict, shipowners have cited the safety of their crews as a reason not to transit.
Shipowners, brokers and insurers also pointed to what they said were several apparently different versions of Iran’s peace plan as one reason for a lack of clarity.
Iran says it has agreed to two weeks of safe passage in coordination with its armed forces and within “technical limitations.”
