Hormuz tanker transits dip again, but contraction still limited as freight rates soar

The number of oil tankers transiting the Strait of Hormuz dipped further June 23 after edging down 5% in the week to June 22, according to S&P Global Commodities at Sea, as shipowners stayed alert on regional military conflicts while freight rates continued to surge.

The situation remained fluid June 24, with US President Donald Trump brokering a ceasefire deal between Iran and Israel to end what he described as the "12-day war" between the two countries, which then quickly accused each other of breaching the truce.

CAS data showed 37 tankers passing through Hormuz on June 23, down from the daily average of 44 on June 16-22 and 46 on June 9-15. A total of 23 tanker transits via the key chokepoint supporting over 30% of global seaborne oil flows were recorded as of midday June 24.

Overall, the contraction has been small even as market sources said some shipping companies had refrained from sending ships to the region. Despite recent declines, the seven-day total of tanker movements in the week to June 22 was only 2.8% below the previous four-week average of 316 vessels per week. It even exceeded the year-ago weekly figure by 23 tankers.

Amid this, tanker freight rates have leapt. Platts, part of Commodity Insights, assessed the rate to carry a 270,000 mt cargo of crude from the Persian Gulf to China at $20.46/mt on June 24, up 106% from before the conflict started.

The rate to carry a 140,000 mt cargo of crude from the Persian Gulf to the Mediterranean has also jumped, but to a lesser extent. Platts assessed it at $21.91/mt June 24, up 40% over the same timeframe.

Sources told Platts that tanker firms Torm and d'Amico International Shipping were continuing to load in the Persian Gulf, while Ardmore is not.

Precaution

Among other sectors, the daily average number of dry bulk carriers sailing through Hormuz stood at 91 in the week to June 22, down from 121 in the prior week and the lowest since at least mid-December at least, according to CAS. Transits of containerships were 119, down from the week-ago level of 136 and the lowest in at least seven months.

Marine insurers have doubled war risk premiums for ships operating in the Persian Gulf, with increasing operational risks and a 60% spike in GPS jamming activities, industry participants said June 23.

"The threat to close the Strait is of significant concern though it is notable that this is yet to be approved by higher authorities in Iran," said John Stawpert, principal director at the International Chamber of Shipping, whose members control over 80% of global merchant fleet.

"It is essential that thorough risk assessments are undertaken for ships transiting in the Gulf of Oman, the Persian Gulf and the Strait of Hormuz."

With Washington indicating the US military actions against Iran had concluded, security consultancy Ambrey said Iran could refrain from targeting US-affiliated ships -- which still operated in Gulf waters throughout June 23 -- but continue to threaten Israeli ships.

"There is a realistic possibility that the conflict between Israel and Iran will continue/restart ... but the risk of US involvement is assessed to have lowered," Ambrey said in a note.