Strait of Hormuz Shipping Plummets Amid US-Iran Tensions
Only four commodity vessels passed through the Strait of Hormuz on Thursday (3 September), a significant drop from the 10-day average of around 15 vessels. This decline is attributed to rising tensions between the United States and Iran, which have raised concerns over supply risks from the Middle East.
The four vessels that did pass through the strait comprised two medium-range tankers, one Kamsarmax bulk carrier, and one Handysize vessel, according to preliminary Kpler data recorded up to 4.55am GMT on Friday (4 September). The data does not include vessels that may have passed through the strait with their Automatic Identification System (AIS) transponders switched off to avoid detection.
The Strait of Hormuz is a critical route for around one-fifth of the world’s crude oil and liquefied natural gas (LNG) supplies. The US blockade of Iran-related shipping has halted Iranian crude oil exports since it was reinstated in mid-July, leading to concerns about supply disruptions.
Oil Prices Surge Amid Tensions
Oil prices are heading for their biggest weekly gain since mid-July on Friday (4 September), amid rising tensions between the United States and Iran. The renewed outbreak of conflict has raised concerns over supply risks from the Middle East, which could impact global oil markets.
The US-Iran conflict has already had a significant impact on shipping through the Strait of Hormuz. Before the conflict began on 28 February, around 125 large commercial vessels passed through the strait each day. These included tankers, gas carriers, bulk carriers, and container ships. However, since the conflict escalated, monitored flows of oil and petroleum products leaving the region have largely remained between 4 million and 6 million barrels per day.
Global Supply Risks
The Strait of Hormuz is a critical chokepoint for global energy supplies, with around one-fifth of the world’s crude oil and LNG passing through it. The US-Iran conflict has raised concerns about supply disruptions, which could have significant impacts on global markets.
Rystad Energy Chief Economist Claudio Galimberti warned that “not much is currently being agreed between the US and Iran” and that flows are expected to remain very low until November. He noted that the economic costs of a prolonged disruption will continue to weigh, highlighting the potential risks to global energy supplies.
Red Sea Shipping Remains Impacted
Meanwhile, in the Bab el-Mandeb Strait in the Red Sea, 22 commodity vessels passed through on Thursday (3 September), down from 31 vessels the previous day and below the 10-day average of 24 vessels, according to Kpler data. The decline in shipping activity is a further indication of the impact of US-Iran tensions on global energy supplies.
Original Article: US-Iran tensions curb shipping through the Strait of Hormuz — Idnfinancials