Shippers Cautious on Hormuz Transit Despite US-Iran Deal

Global oil prices fell about 5% on Monday in response to the news. While the deal is welcomed, shipping companies are waiting for more details, including confirmation of mine clearance in the strait. Shipping association Bimco still considers transits highly risky due to mine concerns.

The US-Iran war with Iran that began on February 28 has largely stopped shipping through the strait, the transit route for roughly a fifth of the world's oil and liquefied natural gas supply, along with vital products such as aluminium and urea.

While traffic through the waterway remains limited, India's Petronet sent the LNG tanker Disha through Hormuz on Monday, the only visible shipment so far, data from Kpler and LSEG showed. The tanker loaded at Qatar's Ras Laffan on March 1-2 and had been west of the strait since.

Shipping association BIMCO said on Monday it still considers transit through the strait highly risky, with mines remaining a key concern. The Japanese Shipowners' Association welcomed the peace agreement but wants to wait longer for more concrete information. Nippon Yusen, the country's biggest shipper, hopes operations will return to normal soon, while Mitsui O.S.K. Lines will only resume navigation once safety is fully confirmed.

German shipowners' association VDR expressed cautious optimism, while German shipper Hapag-Lloyd hoped vessels would cross the strait this week. Danish shipping giant Maersk welcomed the deal but said it was too early to assess its impact and was making no changes yet to its Middle East operations. Norway-headquartered shipping group Wallenius Wilhelmsen also said it was too early to comment on operational implications.

An estimated 155 tankers, carrying oil and chemicals, were in the Mideast Gulf area as of June 15, down from 201 tankers at the end of May. Under unrestricted navigation, the traffic pile-up on either side can be resolved in 8-10 days. However, it would require weeks of de-mining and normalization of insurance rates for resumption of meaningful traffic. Returning to full pre-conflict volumes is realistically a 2027 story, and only if the agreement holds without incident and production recovers at pace.