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.