Oil tankers mull alternative options amid near-halted traffic in Strait of Hormuz

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In the middle of the US-Iran conflict, oil tanker operators are assessing a turbulent market landscape

The Strait of Hormuz, essential for 20% of global oil supply, has seen traffic almost halted since the tensions escalated.

Oil tankers hired in mid-February and positioned at ports across the Persian Gulf are now anchored as international shipping organizations warn of security risks at Hormuz.

Platts Global Dirty Tanker Index surged 80% day over day on March 3, while the Platts Clean Tanker Index increased by 23% during the same period.

However, brokers report that finalizing deals in this volatile environment is nearly impossible.

With many trading companies deferring charters or cancelling voyages, operators are exploring floating storage options for refined products to maintain cash flow and they are even seeking short-term contracts for regional movements.

Still, challenges like surplus cargo shortages and operational constraints make these alternatives complex.

On paper, these alternative solutions may help cover capital and operational expenses, but in reality, may not solve the underlying problem of shipping oil and fuels out of the Middle East.