The threat to oil tankers in the Middle East has reached its worst level since the conflict began
According to experts citing BBC World, the level of danger for oil tankers in the Middle East is now the most severe since the start of the war. The strategically vital Strait of Hormuz, which previously carried about 20 percent of the world's oil and gas supplies, is now experiencing a severe drop in traffic. On Sunday, only eight ships passed through, and on Saturday, just 11 vessels navigated the strait. Before the conflict began, more than 100 ships regularly passed through the waterway. A temporary pause in hostilities in early June had initially helped traffic increase, but renewed military actions between the involved nations have once again caused a significant decline.
To avoid being targeted, many oil tankers are now disabling their tracking systems when passing through the Strait of Hormuz, according to Kpler, a leading ship-tracking firm. Matthew Wright, an analyst at Kpler, emphasized that the current threat to oil trade is the worst since the crisis began, underscoring the increased instability and dangers in the region.
A new security risk emerges in the Red Sea
The Red Sea has emerged as a new flashpoint in the conflict, as Iran-backed Houthi rebels have started attacking Saudi tankers using the alternative shipping route. On 20 July, the Houthi militia declared what it described as a 'blockade' on Saudi Arabian ports in the Red Sea. Since that date, attacks on ships have continued at an alarming rate, creating further risks for tankers that have rerouted away from the Strait of Hormuz.
Tim Wilkins, the managing director of Intertanko, a trade body representing tanker operators, described the situation as 'broadening, deteriorating, and increasingly complex.' Kpler data indicates that 28 ships passed through the Bab el-Mandeb strait in the Red Sea last Saturday, but six of them had turned off their tracking devices, suggesting these vessels were trying to avoid being detected.
International shipping firms continue to operate amidst heightened risks
Although the Red Sea route is fraught with danger, some shipping companies have continued to navigate the waters. Hapag-Lloyd, a major global shipping company, has stated that some of its vessels are still operating in the area but remain on high alert. The company warned that while some ships are still passing through the region, restoring normal oil transport would take several months due to disrupted services and redeployments of vessels to other areas.
Iran's foreign ministry has stressed that any deal aimed at reopening the Strait of Hormuz would not ease current restrictions as long as U.S. 'aggression' continues. Wright pointed out that the ongoing negotiations might result in a 'false start,' with meaningful progress only possible if at least one party makes significant concessions.
Oil prices dropped sharply after U.S. President Donald Trump announced he would cancel planned military strikes on Iran due to ongoing talks. Brent crude initially fell to $81.55 a barrel before recovering slightly to $84.05. However, the decline highlighted the heightened uncertainty in the region and its impact on the global oil market.
Kpler added that the number of ships loading crude oil for export to Asia has dropped to just four per day, the lowest level since the war began. While not all vessels are currently avoiding the Red Sea route, the number of ships passing through remains about 50% of the pre-attack level. The Houthi attacks are particularly targeting Saudi shipping, which has forced some companies to either reduce operations or adapt to the changing security landscape.
The current situation in the Strait of Hormuz is not the only challenge for oil trade. The recent escalation in the Red Sea has added another layer of complication to the supply chain. Wright explained that the ongoing issues in the strait were already causing a bottleneck in oil flows, and the emerging threats in the Red Sea have further strained the system. This 'problem stacked on top of a problem' has created a volatile environment for tanker operators and traders around the world.
The impact of this dual threat has extended beyond security concerns, affecting global energy markets. The disruption has forced companies to make difficult decisions, including rerouting vessels and suspending services. The long-term consequences could include extended delays in shipping and higher costs for oil and gas exports, affecting economies that rely heavily on these resources.
As the situation evolves, companies like Hapag-Lloyd are preparing contingency plans. The spokesperson noted that if the Strait of Hormuz were to reopen, most ships could leave the region relatively quickly. However, the process of restoring normal cargo flows would likely take several months to complete due to the widespread disruptions and adjustments made in response to the ongoing conflict.
Despite the potential for talks with Oman to resolve the situation in the Strait of Hormuz, Iran has not indicated any immediate agreement to restore normal traffic. The Iranian foreign ministry has also reiterated that no restrictions will be lifted unless U.S. 'aggression' against Iran stops. This stance has left many in the shipping industry watching closely for any signs of progress or further deterioration in the region.
