Strait of Hormuz tensions drive tankers to halt or reroute

A number of oil tankers are deliberately avoiding transit through the Strait of Hormuz, the narrow waterway connecting the oil-rich Persian Gulf to international waters, following the US and Israeli airstrikes on Iran. While the strait remains technically open and some vessels continue to pass through, Bloomberg tracking data show tankers accumulating both inside and outside the entrance.

Shipping companies are taking a cautious approach. One owner interpreted an advisory as effectively closing the strait, three are reviewing transit policies, and another has instructed its vessels to proceed with caution. All five spoke on condition of anonymity due to the sensitivity of the situation.

The Strait of Hormuz is the world’s most critical oil chokepoint, carrying roughly a fifth of the world’s seaborne oil and a significant portion of natural gas each day. Despite the tension, two naval observers confirmed that maritime flows have not been halted. Traders remain alert for broader disruptions, including the potential impact of Iranian retaliatory strikes and any interruptions at regional ports.

Weekend oil prices rose following the strikes. With main oil futures markets closed on Saturday and Sunday, the real-time market impact is partially obscured. However, retail trading platforms such as IG Group Ltd. reported West Texas Intermediate prices reaching as high as $75.33 per barrel, a gain of up to 12% from Friday’s close.

Ship-tracking data indicate that at least three liquefied natural gas (LNG) tankers bound to or from have paused their voyages to avoid the strait. Qatar, the world’s second-largest LNG exporter, accounted for roughly 20% of global LNG supply last year, and its shipments must transit Hormuz to reach buyers in Asia and Europe.

Specific vessels have also been affected: the oil tanker Eagle Veracruz, carrying 2 million barrels of Iraqi and Emirati crude en route to China, has stopped at the western approach to the strait. It has been joined by the Front Beauly, transporting a similar amount of Saudi crude. Bloomberg data show a build-up of vessels halting voyages from the east toward Hormuz has been ongoing for most of the week.

By Tamilla Hasanova