Ship Traffic in the Strait of Hormuz Slowly Increases While Risks Remain High

Following the recent conflicts in the Middle East, the return of ship traffic through the Strait of Hormuz is progressing much slower than expected. Despite a renewed easing of military tensions in the region, ship owners and insurance companies remain highly cautious about continuing to operate in these waters. Because war risk premiums remain at very high levels, maritime companies have serious reservations about transiting the strait. This situation once again highlights the fragility of this waterway, which is of critical importance to global energy. In this environment of uncertainty, the full recovery of crude oil exports from Gulf countries is also delayed.

Gulf oil exports, which were at normal levels until the middle of March, experienced a significant drop shortly after due to the disruptions. Export volume fell to a very low level of 3.31 million barrels per day on 21 May. The rise in exports to 6.97 million barrels per day towards the end of June created hope for a recovery in the markets. However, despite these figures, the overall average for the year remaining 40 percent lower compared to the previous period is not enough to fully alleviate concerns. These data clearly reveal that even if the conflicts have stopped, it is not possible for commercial activities to suddenly return to their old reliable order.

The International Maritime Organization (IMO) had launched a comprehensive plan to evacuate thousands of seafarers and hundreds of ships stranded in the region during the period of the most intense conflicts. This operation, carried out in cooperation with coastal states and maritime industry stakeholders, had to be suspended due to an attack on a ship in the Gulf of Oman. In this process, where a security guarantee could not be fully ensured, maritime authorities decided to suspend the evacuation operation to reassess the safety of ships in the region. Due to disagreements and security concerns, maritime traffic in the region is prevented from operating at full capacity. Thus, evacuation and safe transit processes are progressing in direct dependence on regional tensions.

There are also serious disagreements between Iran and international maritime authorities regarding the safe routes to be used by ships. While Iran argues that safe transit will only be possible through routes it approves, the IMO wants to expand this scope with temporary routes covering the waters of Iran and Oman. This disagreement stands out as one of the main factors preventing the strait from being fully opened to commercial maritime traffic. Although there has been some decline compared to the peak in March when the conflicts began, maritime insurers still keep war risk premiums several times higher than their previous levels. This cost increase pushes shipowners to avoid sending their ships to the Gulf or to demand much higher freight rates.

Under these challenging conditions, oil producers in the Gulf have started to turn to alternative routes to reduce their dependence on the Strait of Hormuz. While Saudi Arabia uses its east-west pipeline more actively, the United Arab Emirates relies on the Habshan-Fujairah pipeline, which delivers crude oil to the Gulf of Oman. Although these alternative lines provide producers with a certain flexibility, they are not sufficient to fully meet the volume of normal tanker traffic passing through the strait. Because the existing pipeline capacities remain limited, increasing production alone will not be enough for a real recovery in exports. As a result, although oil loading activities continue to some extent, the lack of a safe and commercially viable route has put the industry into a complete waiting period.