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Strait of Hormuz: Shipping Traffic Severely Disrupted Amid Ongoing Conflict

The Strait of Hormuz, a vital route for oil and gas shipments, is facing severe disruptions due to ongoing conflict. Shipping traffic has drastically decreased, with only a fraction of normal vessels transiting the strait. While some countries, like China and Greece, manage to navigate the waters, many others are rerouting their cargo to avoid risks. The unpredictability of attacks on vessels has created significant concerns for shipowners, leading to a potential long-term impact on global energy markets. As the situation evolves, the implications for oil and gas supply chains remain critical.
 

Significant Disruption in Shipping Traffic

The Strait of Hormuz, a vital passage for global oil and gas shipments, has seen a drastic reduction in shipping activity since the US-Israeli airstrikes on Iran on February 28. Current shipping traffic has plummeted to a mere fraction of its usual volume. According to S&P Global Market Intelligence, only 21 tankers have navigated the strait since the onset of the conflict, compared to over 100 vessels daily prior to the escalation. Consequently, hundreds of ships are now stranded, with approximately 400 vessels operating in the Gulf of Oman, many awaiting permission to proceed. Thousands of seafarers remain stuck on their ships in the vicinity.


Current Status of the Strait of Hormuz

Is the Strait of Hormuz Completely Closed?

While Iran has exerted strict control over the strait, maritime experts indicate that some vessels are still being permitted to pass under specific negotiated conditions. This implies that Tehran may be allowing limited traffic rather than enforcing a complete blockade. However, attacks on shipping vessels persist, with the International Maritime Organization reporting at least 16 incidents involving vessels near regional ports, including Fujairah and Khor Al Zubair.


Countries Still Navigating the Strait

Which Countries’ Ships Are Still Moving?

China

Ships associated with China seem to be experiencing fewer interruptions. Numerous vessels indicating Chinese ownership or crew have continued their operations in the Gulf, as noted by maritime intelligence firm Windward. Analysts suggest this may indicate an informal access filter, allowing these vessels to signal neutrality to avoid being targeted. From March 1 to March 15, 11 China-linked vessels successfully transited the strait, according to Lloyd’s List Intelligence. However, risks remain, as one China-owned ship was struck by shrapnel on March 12 while en route to the United Arab Emirates.

Greece

Greek-managed tankers have been among the first major operators to navigate the route. The Shenlong, a Suezmax tanker, successfully passed through the strait carrying approximately one million barrels of Saudi crude to Mumbai. Another vessel, Smyrni, completed a similar journey.

India

India has engaged in direct negotiations with Tehran. Foreign Minister S Jaishankar reported that discussions have been "productive" and yielding positive outcomes. Three Indian vessels transporting liquefied petroleum gas have been granted passage, while around 22 ships carrying crude and gas remain anchored, awaiting clearance.

Pakistan and Turkey

A Pakistan-flagged tanker carrying crude from Abu Dhabi recently became the first confirmed non-Iranian cargo vessel to transit while openly broadcasting its position. Turkish authorities reported that one Turkish-owned vessel was also allowed to pass after visiting an Iranian port, although 14 others are still in the region waiting for approval.


Challenges for Shipowners

Why Are Shipowners Avoiding the Route?

The primary concern for shipowners is the unpredictability of the situation. Maritime analysts have noted that attacks have not followed a consistent pattern. While some vessels linked to Western or Gulf nations have been targeted, others from countries such as Thailand, Vietnam, and Brazil have also faced attacks. This broad targeting of busy commercial shipping lanes has created uncertainty regarding which vessels may be at risk. Bridget Diakun, a senior analyst at Lloyd’s List Intelligence, stated that the lack of a clear rationale complicates planning for transiting vessels. As a result, shipping companies are increasingly rerouting their cargo. Of the 81 container vessels initially destined for ports along the Strait of Hormuz, 43 have diverted to other Gulf ports, while others have opted to avoid the region entirely. Cargo is now being redirected to alternative hubs such as Fujairah and Khor Fakkan in the United Arab Emirates, and Sohar in Oman, from where goods are transported inland by truck.


Global Implications

How it Affects the World

The Strait of Hormuz is one of the most crucial energy chokepoints globally. Even minor disruptions can have significant repercussions for oil and gas supplies, as well as global pricing. With the conflict now entering its third week, the combination of restricted access, sporadic attacks, and increasing congestion is raising alarms about a potential prolonged impact on energy markets.