Strait of Hormuz Crisis: Shipping Still Hesitant
Despite U.S. Action
The United States said it has started to
block vessels doing business with Iran from the strait. Details on how that would
work are unclear.
1. No
Immediate Return of Ships
·
Shipowners are unlikely to resume normal
operations through the Strait of Hormuz.
·
Key reason: lack of clarity on safety guarantees
for commercial vessels.
2. Major
Concern:(Safety)
·
Shipping firms say the United States has not
clearly explained how ships will be protected.
·
Fear that Iran may retaliate by targeting
commercial vessels.
·
Result: Very low risk appetite among global
shipping companies.
3.
Shipping Traffic Collapse
·
Pre-conflict: 120+ ships/day
·
Now: Around 14 ships/day
·
Indicates severe disruption in global trade
flows, especially oil and gas.
4. U.S.
Blockade Strategy
·
U.S. military has moved to:
o
Block Iran-linked shipping routes
o
Allow non-Iranian vessels to pass
·
However, no firm commitment to escort or defend
ships has been detailed.
5. Iran’s
Position
·
Iran continues limited navigation near its
coastline.
·
Has warned of strong retaliation, signaling it has “multiple levers.”
·
Still using the strait as strategic leverage
in the conflict.
6. Global
Energy Impact
·
Reduced tanker movement has:
o
Cut global oil and gas supply
o
Raised fuel prices (petrol,
diesel, etc.)
·
Highlights the strait’s importance as a critical
energy chokepoint.
7.
International Response
·
International Maritime Organization criticized the
blockade as unhelpful for conflict resolution.
·
France and United Kingdom are planning a multinational
naval mission:
o
Could involve up to 35 countries
o
Aim: Ensure safe passage (naval escorts)
8. Key
Issue Going Forward
·
Shipowners need:
o
Clear rules of engagement
o
Guaranteed naval protection
·
Without these, traffic will likely remain minimal
despite U.S. intervention.
Bottom
Line
The crisis has shifted from military control
→ commercial confidence.
Until shipping companies feel safe and protected, the Strait of Hormuz
will remain underutilized, keeping global energy markets under pressure.
Shipowners
and shipping experts said they did not expect a large number of vessels to return
quickly to the Strait of Hormuz as the United States began a military effort Monday
to end Iran’s control of the crucial waterway.
In
particular, they said, the U.S. plan lacked detail on how commercial vessels would
be protected if they decided to go through the strait.
“It
is still unclear how the safety of the passage of commercial ships will be ensured,”
said Jerry Kalogiratos, chief executive of Capital Clean Energy Carriers, a shipping
company that operates oil and gas tankers.
The
uncertainty of protection and fear that Iran may attack commercial vessels in response
to the United States’ move mean that the number of ships going through the strait
will most likely remain extremely low.
After
talks between the United States and Iran over the weekend did not lead to a peace
deal, President Trump said the United States would act to stop Iran from using the
strait to its own advantage.
Iran
has been allowing a small number of ships, its own vessels included, to pass through
the strait, using a route that runs close to Iran’s coastline and can involve docking
at Iranian ports. The United States Central Command acted on Monday to stop those
shipments but said it would allow non-Iranian traffic.
Fourteen
vessels went through the strait on Saturday and the same number on Sunday, according
to Kpler, a maritime data firm. Those figures represented an uptick in wartime traffic,
but are still well below the more than 120 ships that went through before the war
daily.
“There
is still a trickle of trade making its way through,” said Alexis Ellender, an analyst
at Kpler, adding that the risk appetite of major shipping
companies is “incredibly low.” Two vessels linked to Iran went through the strait
on Monday, before the U.S. blockade began, according to Kpler.
Although
the number of vessels passing through the strait has fallen sharply, ships linked
to Iran have continued to navigate the waterway at rates close to those before the
first U.S. and Israeli strikes in late February.
Last
week, there were 244 tankers west of the strait in the Persian Gulf, and 156 tankers
east of the waterway, according to S&P Global Market Intelligence.
Iranian
officials have signaled that Iran would strike back against
the blockade.
On
Sunday, Mohsen Rezaei, a former commander who is now a senior adviser to the supreme
leader Mojtaba Khamenei, said Iran had “large, untouched levers” to counter any
naval blockade, and that the country would not be pressured “with tweets and imaginary
plans.”
Arsenio
Dominguez, the head of the International Maritime Organization, the U.N. agency
responsible for shipping safety and security, said Monday at a news conference in
London that the blockade by the United States “just doesn’t really help anything
in finding a solution to the conflict.”
The
drastic reduction in tankers leaving the Persian Gulf through the strait has cut
off a large share of oil and gas supplies to the world, pushing up the prices of
gasoline, diesel and other energy products. Iran has used its de facto control of
the strait as leverage against the United States and Israel during the war.
In
announcing the blockade, Central Command said it would “not impede freedom of navigation”
of ships leaving ports from other, neighboring countries,
and said it would provide more information to commercial mariners.
The
announcement signaled that the United States was willing
to work with shipping companies that it deemed neutral in the war, yet there were
few details on Monday on how it would do so. And some experts said it fell short
of a commitment to shield vessels from Iranian attacks.
“It
hardly constitutes a promise to protect non-Iranian shipping, which is likely the
problem that the commercial companies and ship masters want solved,” said Eugene
Gholz, an associate professor of political science at the University of Notre Dame
and expert on the Strait of Hormuz.
Mr.
Kalogiratos, the shipping executive, said the current
information from the United States isn’t enough to “materially change” its risk
assessment of the passage.
“The
essential element here is the perception of safety for shipowners, operators and
our seafarers, and clear rules of engagement as far as the transit is concerned,”
he said.
Several
countries have opposed Iran’s stranglehold on the strait, not only because it has
led to higher energy costs, but also because the waterway was not controlled by
any country before the war and ships could pass through freely.
“It
is important to safeguard freedom of navigation in Hormuz and ensure that all ships
transit freely and safely,” said Noam Raydan, a senior fellow at the Washington
Institute for Near East Policy. “But I don’t expect Iran to make this U.S. mission
easy.”
She
said ships may remain reluctant to enter the Persian Gulf through strait and find
themselves unable to exit.
Commercial
ship operators may be more likely to send their vessels through the strait if there
is a naval escort as protection against Iranian attacks. Early in the war, Mr. Trump
said United States might provide an escort but later pressed other countries to
do so.
President
Emmanuel Macron of France said on Monday that France and Britain would organize
a conference in the coming days to assemble a multinational mission to secure passage
for ships in the Strait of Hormuz. The two countries have already held planning
meetings for a coalition of up to 35 countries.
“This
strictly defensive mission, distinct from the belligerents, will be deployed as
soon as the situation permits,” Mr. Macron said on social media.