renewed U.S.-Iran conflict chokes Hormuz

Ship traffic in the Strait of Hormuz has decreased since US President Donald Trump’s blockade came into effect last week; As conflicts between the United States and Iran intensify, shipowners are increasingly avoiding one of the world’s most important energy corridors.

Strait transits showed a sharp decline in multiple shipping datasets due to new US attacks on Iran, Tehran’s imposition of a blanket ban on maritime traffic, and new attacks on commercial ships; It has prompted operators to re-evaluate the risks of entering the Gulf.

Lloyd’s List Intelligence recorded just 53 ship passages in the week to July 20; This number, which was 157 the previous week, decreased by 66%. Tanker and gas carrier movements, the ships responsible for transporting most of the Gulf crude oil and liquefied natural gas, fell from 90 to 30.

Kpler data similarly shows that activities deteriorated soon after the blockade began. Daily crossings, which had averaged more than 20 ships before July 15, dropped to 16 that day and fell to single digits on July 16. Traffic remained sluggish for the rest of the week, with occasional rebounds.

The gradual normalization that took weeks after the ceasefire in mid-June encouraged some shipowners to resume Gulf voyages has been reversed with the latest slowdown.

Instead, renewed fighting has once again nearly emptied the strategic waterway, which carries roughly a fifth of global oil consumption.

“Things have slowed down significantly since the reignition of tensions,” said Bridget Diakun, senior risk and compliance analyst at Lloyd’s List Intelligence. “That’s not surprising; as you’d expect, people are stepping back and re-evaluating.”

But traffic hasn’t completely disappeared. “Every person has a different risk appetite,” Diakun said. he said. “We’re still seeing tankers coming in and out, it hasn’t stopped completely.”

Ship movements will likely continue to come in “ebbs and flows” rather than recovering steadily, shipowners said, as they briefly seize perceived windows of safety before retreating again when tensions escalate.

S&P Global data painted a similar picture. Only 40 ships passed through the strait between July 17 and July 19; This meant an average of 13 crossings per day; Weekly traffic through July 19 dropped by almost 50% compared to the previous week.

Merchant ships still accounted for more than 70% of traffic during the period, but only a third were assessed as complying with maritime restrictions. Iranian-linked and sanctioned ships continued to dominate many movements; This shows that mainstream international shipowners are reluctant to return.

“The latest tension shows how premature expectations for a rapid opening of the Bosphorus are,” said Saul Kavonic, head of energy research at MST Marquee.

“The hostilities and the reimposed blockade have put the conflict on a renewed trend of escalation,” he said, adding that flows in Hormuz had fallen to about 15% of pre-war levels. Oil could retest $100 a barrel if the current intensity of conflict continues for several weeks or regional energy infrastructure is attacked, he told CNBC via email.