Shipping Volumes in the Strait of Hormuz
Jotaro Tamura, CEO of Japan’s Mitsui O.S.K. Lines, suggested that shipping volumes through the Strait of Hormuz might take “at least two weeks, maybe less than a month” to bounce back to where they were before recent conflicts.
He emphasized the importance of a substantive agreement that addresses the realities in the strait, so shipping companies can navigate with assurance. This statement came during an interview published on Tuesday, though it was recorded prior to President Trump’s announcement of a peace deal with Iran.
Reflecting on previous failed attempts to reopen the strait since Iranian terrorist attacks suspended traffic in March, Tamura noted that it would take time for shipping and insurance firms to regain confidence in safety.
“Given recent months’ experiences, it’s reasonable to expect this process may take a few weeks, or perhaps a month,” he stated.
Mitsui O.S.K. Lines operates over 900 vessels, including more than 200 oil and chemical tankers, making it the largest tanker operator globally.
Other significant shipping companies, like Hapag-Lloyd, found the news of the deal “encouraging.” They hope that their stranded vessels could start moving out of the Persian Gulf soon after the peace agreement was signed on Friday, though they refrained from estimating when regular traffic would resume through the strait.
Jakob Larsen, Chief Safety and Security Officer at the Baltic Sea and International Maritime Council, pointed out that uncertainties remained regarding key elements like timing and safe routes. He expressed a more cautious outlook on how quickly operations might return to normal.
“We believe the security situation for the shipping sector is still precarious, making it extremely risky for ships to start moving through at this time,” Larsen remarked.
Notably, on April 17, Iran had claimed the strait was open only to close it again within a day, forcing numerous ships to turn back—some even came under fire from the Iranian Revolutionary Guards Corps.
“It’s crucial for shipowners to continue with thorough risk assessments and prioritize the safety of their crews,” Larsen added.
As for the ships trapped in the Persian Gulf, they are eager to set sail when it’s safe. The focus now should be on instilling confidence in shipowners that passage through the Strait of Hormuz is both permitted and secure.
The International Maritime Organization estimates approximately 500 vessels currently remain stranded in the Persian Gulf. It plans to prioritize ships that have been stuck for over 100 days for safe transit once a feasibility assessment has been conducted to ensure protection against hazards like mines and potential traffic jams.
Before the onset of Operation Epic Fury in late February, around 135 vessels were entering and exiting the Strait of Hormuz daily. Given the need to prevent congestion, Tamura’s forecast of around a month to clear the backlog seems fairly reasonable.
At a press conference, Tamura reiterated his firm stance against paying any tolls or ransoms to Iran for safe passage. He mentioned that four Mitsui O.S.K. Lines ships were able to cross the strait when it was closed without paying any ransom.
He explained that some of these successful crossings were due to the cooperation of relevant authorities and governments. It’s speculated that the ships may have been registered with countries, like Oman or India, which maintained diplomatic connections with Tehran during the crisis.
On Tuesday, oil prices dipped below $80 a barrel for the first time since the strait crisis began, reflecting industry optimism that the U.S.-Iran deal will hold and keep the strait accessible.
Brent crude, the international oil benchmark, fell to $79.61 on Tuesday, down from a peak of $126 in April amid escalating tensions between the U.S. and Iran.
“While the market is clearly welcoming these new developments, it’ll take time to see how quickly traffic through the Strait will normalize,” UBS Asset Management remarked.
UBS noted concerns about mines in the waterway, emphasizing that the market would seek solid evidence of shipping companies’ and insurers’ confidence before resuming transit.
Goldman Sachs analysts forecast that export volumes could return to pre-war levels by the end of July, although the specifics of the agreement remain unclear. Previously, they had anticipated normal shipping levels by the end of August.
Following President Trump’s declaration, the ship-tracking service labeled the Strait of Hormuz “free and open” on Sunday, encouraging global ships to begin operations. However, there hasn’t been much movement from the Persian Gulf since then.
Matt Smith, Principal Oil Analyst at Kpler, mentioned that it’s unsurprising that ships are waiting for formal confirmation of the U.S.-Iran deal, citing rising insurance premiums as a factor that could delay their movement through the Strait.
Smith warned of a “chicken and egg” scenario, suggesting months might pass before traffic levels recover, as insurers are unlikely to lower premiums without confidence that ships can transit safely.
As of now, only seven vessels are believed to have crossed the Strait of Hormuz since the peace deal announcement, with around 75 percent of tankers remaining stationary.
A significant concern is the potential risks due to the unknown quantity of mines that Iran may have irresponsibly deployed in the strait, with no clear plan for their disarmament or removal.
Another point of unease is Iranian officials discussing the imposition of tolls and fees on international shipping, despite Trump’s assurance that the peace agreement prohibits such actions. Shipowners and insurers are wary of Iran’s response if companies like Mitsui O.S.K. Lines refuse to pay any demanded ransoms.
