Iran picks which ships can and can’t enter Strait of Hormuz
Iran is moving to turn its effective shutdown of the Strait of Hormuz into regulating passage of ships from selected countries through the strategic waterway.
Traffic through the Gulf channel has climbed to its highest level in weeks as more countries and shipping firms secure passage agreements with Iran, Bloomberg reports.
Liquefied petroleum gas carriers and tankers linked to countries including India have been among the most active, with ships transiting under negotiated arrangements as Tehran permits carefully vetted cargoes to move.
Malaysia-linked and Iraqi crude shipments are also moving, including a Petronas-chartered tanker carrying about 1 million barrels, after Tehran granted exemptions or toll-free passage following diplomatic engagement. At the same time, Japanese, French and vessels from selected other countries have crossed along carefully managed routes.
Governments from the UAE and India to the Philippines, meanwhile, are bracing for fallout in the coming days when the deadline U.S. President Donald Trump set for Iran to open the Strait of Hormuz expires.
Trump said U.S. forces would destroy Iranian power plants and bridges if Iran fails to comply with his ultimatum by 8 p.m. Washington on Tuesday – 3:30 a.m. Wednesday in Tehran. Iranian officials say they won’t obey Trump and have promised to respond with attacks on power plants in Israel and Arab states allied with the U.S.
The shutdown of the Strait of Hormuz is threatening income flows to the Philippines by disrupting economic activity across Gulf states where more than 2 million Filipino workers are employed. As companies cut operations, transfers sent home through banks and exchange agencies have been slowing, putting pressure on household incomes in a country where remittances account for roughly 10% of GDP.
At the same time, the disruption is hitting India’s fertilizer supply chain, which depends heavily on Gulf exports of urea and ammonia that move through Hormuz during the peak planting season. With shipments delayed or halted, Indian importers face tighter supplies and rising costs, raising the risk of lower yields and higher food prices in the months ahead.
ADNOC chief says Iran shipping disruptions amount to extortion
The head of the UAE’s national oil company said Iran’s disruption of shipping through the Strait of Hormuz amounts to extortion, as attacks and threats against vessels curb traffic through the key energy corridor.
“When Hormuz flows, energy moves and economies grow – when it is disrupted, everyone pays.” Dr. Sultan Al Jaber, Group CEO of ADNOC and the UAE’s Minister of Industry and Advanced Technology, said in a LinkedIn post.
Warning that the crisis risks undermining global energy markets, Al Jaber called for international cooperation “to protect the free flow of energy and safeguard economic stability.”
Meanwhile, Saudi Arabia’s oil exports fell by about 50% in March, dropping by roughly 3 million to 3.5 million barrels a day because of the blockade, Bloomberg reports.
The disruption has forced Saudi Aramco, the world’s biggest oil exporter, to rely on its East-West pipeline to move crude to Red Sea ports, which have capacity of roughly 5 million barrels a day, compared to normal export levels of about 7 million barrels a day.
Strait of Hormuz traffic plummets amid fears of new Iranian attacks
About 1,000 vessels carrying roughly 20,000 crew members are unable to pass through the Strait of Hormuz amid fears of Iranian attacks, cutting traffic by nearly 90%.
The International Maritime Organization says many of the ships are idling near the narrow waterway, while 2,474 vessels, including 178 oil tankers, have remained in the Gulf waters since March 5.
IMO Secretary-General Arsenio Dominguez expressed “grave concern” after recent attacks killed at least seven seafarers and called on operators to exercise “maximum caution.”
Roughly 20% of the world’s oil is transported through the Strait of Hormuz.
Shipping giants freeze container traffic amid rising Gulf threats
Container shipping giants Hapag-Lloyd and A.P. Moller-Maersk have halted bookings and begun diverting vessels away from the Middle East amid escalating security risks in the Strait of Hormuz, disrupting global trade routes.
The moves by the two European carriers – among the world’s biggest container lines – come as the threat of missile and drone attacks has forced shipping companies to reroute cargo or suspend transits through the narrow Gulf waterway, The Wall Street Journal reports.
More than 3,000 vessels have been stuck in Gulf ports or waiting outside the strait as insurers withdraw war-risk coverage and shipowners hesitate to send crews into what has effectively become a combat zone.
At the same time, oil shipping has begun to stall as dozens of supertankers either idle inside the Persian Gulf or slow their voyages while owners assess whether it is safe to attempt the passage, Bloomberg reports.
The disruption in the corridor that normally carries roughly a fifth of the world’s oil supplies has sent tanker charter rates soaring and raised fears of prolonged shocks to global supply chains.
Shipping insurers threaten to cancel policies after Iran strikes
Insurance companies are telling ship owners they may cancel policies and raise coverage prices as much as 50% for vessels traveling through the Gulf and Strait of Hormuz, the Financial Times reports.
Cargo war risk insurers – which cover commodities carried on tankers, such as grain and oil – said that they were preparing to cancel policies and renegotiate coverage at higher prices, rather than denying coverage for ships sailing into the region, the newspaper said.
Danish container shipping line Maersk, meanwhile, halted sailings through the Suez Canal and Bab el-Mandeb Strait, the chokepoint connecting the Red Sea to the Gulf of Aden and the Indian Ocean, citing escalating regional security risks.
The move is expected to lengthen shipping times and raise freight costs.
Oil tanker daily rates hit $200,000 with Middle East tensions rising
Oil tanker shipping costs urged to their highest level in six years as traders scramble for vessels amid rising Middle East exports and mounting geopolitical tensions, with Saudi shipping giant Bahri moving to expand its fleet.
Daily rates for very large crude carriers, known as VLCCs, on the key Mideast route to Asia have more than tripled this year to approach $200,000, while crude prices themselves have climbed to a six-month high, reflecting tight vessel supply and stronger demand for oil shipments.
The spike has been fueled in part by India and other Asian buyers increasing purchases of Middle Eastern crude as they reduce reliance on Russian supplies, prompting Bahri to snap up additional ships to capitalize on the expanded market.
In his State of the Union address on Tuesday night, President Donald Trump warned Iran against further escalation in the region, heightening market concerns about potential disruptions to oil flows.
Additional upward pressure on freight costs has come from stronger Chinese oil demand, which is tightening tanker availability, while Iranian officials have renewed threats to the Strait of Hormuz, raising fears over a key global shipping chokepoint.
Red Sea calm revives shipping traffic through Suez Canal
Easing tensions in the Red Sea have delivered a boost to Egypt’s Suez Canal, with hundreds of ships returning to ply the global trade route in October.
Canal revenues rose 14% year-on-year between July and October, with 4,405 ships carrying 185 million tons of cargo during the period.
More than 200 ships returned to the canal in October, leading to the highest monthly total since Houthi attacks off Yemen sharply reduced traffic, Reuters reports.
Lieutenant General Osama Rabie, Chairman of the Suez Canal Authority, said that the positive climate following last month’s Sharm el-Sheikh summit on Gaza’s future encouraged many carriers to return.
Yemen’s Iran-aligned Houthis carried out over 100 attacks on ships in the Red Sea, Gulf of Aden, and Bab al-Mandab Strait, during 2023-2024.
