Every day, about 80 oil and gas tankers typically pass through the , the narrow seaway off Iran’s southern coast, which carries one-fifth of the world’s and a significant amount of .
Yesterday, Monday, only two oil and gas tankers appeared to have passed through the straits, according to a New York Times analysis of shipping activity by Kpler, an industry data firm. On Tuesday, a tanker crossed.
“It’s a de facto shutdown,” said Dan Pickering, chief investment officer at Pickering Energy Partners, a Houston-based financial services firm. “There are a considerable number of ships on both sides of the straits, but none willing to cross.”
Source: The New York Times
The tankers have been avoiding Hormuz since the start of the US and Israeli attacks on Iran that began on Saturday. A prolonged conflict could have wide-ranging effects on the global economy, threatening the energy supplies of countries around the world and fueling inflation.
Price increase
International oil prices have risen by 12% since the start of the conflicts, with the price hovering around $81 a barrel on Tuesday, and Asia.
A senior Iranian military official this week threatened to “set fire” to all ships passing through the Strait of Hormuz. Ships in the wider area have already been attacked. Several oil and gas facilities have also been damaged or affected by shelling in the area, although the damage does not initially appear to be catastrophic.
A fire broke out at a major energy center in the United Arab Emirates’ Fujairah on Tuesday from the debris of a downed drone, authorities said. On Monday, Qatar halted production of liquefied natural gas, or fuel that has been cooled so it can be transported by ship, after attacks on its facilities.
The sharp decline in tanker traffic is reducing the supply of oil and natural gas in global markets, pushing up the prices of both commodities. And the longer ships stay out of the Strait of Hormuz, the less oil and natural gas reaches the world, which could drive up prices even more.
Shipping companies have grounded their tankers to protect their crew and cargo, but also due to insurance companies charging significantly more to cover the ships.
Trump’s statement
On Tuesday, President Trump said that “if necessary,” the US Navy would begin escorting tankers through the strait. He also said a US government agency would begin offering “civil risk insurance” to shipping companies in the region.
In addition to tankers, other large vessels regularly pass through the straits, such as car carriers and container ships. Under normal conditions, almost 160 ships make the journey each day.
Some ships in the area turn off devices that transmit their position, while others transmit false locations, making it difficult to get a full picture of traffic in the straits.
The Shiva (one of two tankers that crossed the straits on Monday) is a small tanker that has repeatedly misrepresented its position, according to TankerTrackers.com, which tracks global oil shipments.
According to Kpler, it is suspected of transporting oil from Iran, which is subject to sanctions.
Critical passage for 80% of Asia’s oil and natural gas
The oil and natural gas usually transported through the strait come from major producing countries such as Saudi Arabia, Iraq, Iran and the United Arab Emirates and are exported around the world.
In 2024, more than 80% of the oil and gas transported through the Straits of Hormuz was destined for Asia. China, India, Japan and South Korea were the top importers, according to the US Energy Agency.
The countries have energy reserves that could see them through the coming months, but continued disruption of the strait could hurt their economies.
Several major disruptions have upset supply chains in recent years, but stopping tankers in the straits could have a huge impact.
