- Satellites reveal a 97% drop.
- List of 77 ships raises transit risks.
- Insurance and Shipping: A Hidden Cost of the Crisis
- Oil and Gas Under Pressure from the Strait of Hormuz
- Pipelines do not fully compensate for Hormuz.
- Bab al-Mandab Adds Another Route of Risk
- The Hormuz crisis goes beyond oil.
- Hormuz does not need a complete closure.
Abu Dhabi, UAE – The fundamental question is no longer whether the Strait of Hormuz is officially closed, but rather how many vessels are still transiting it. It also hinges on how many companies are willing to shoulder the risks associated with the voyage. Recent data indicate a sharp decline in commodity vessel traffic compared to pre-crisis levels; prior to the outbreak of the war on February 28, traffic volume reached approximately 125 vessels per day, whereas current transit numbers are extremely limited. However, AIS data do not capture the full picture, as some vessels may disappear from tracking systems if their Automatic Identification System (AIS) transponders are switched off.
Satellites reveal a 97% drop.
An academic study integrating AIS data and satellite imagery revealed a roughly 97% drop in maritime traffic during a past period of disruption. The study highlights the importance of monitoring vessel movements from multiple sources, particularly when tracking data is incomplete. Crucially, a decline in traffic can be more telling than a formal announcement of closure; a waterway may remain geographically open, yet its commercial utility diminishes.
List of 77 ships raises transit risks.
The Iranian authority overseeing the Gulf strait announced a list of 77 vessels accused of violating transit protocols, warning of potential fines, detention, or confiscation. The authority also warned that additional vessels could be added to the list and called on marine insurance and classification bodies to cease providing services to the listed ships. Here, the crisis shifts from the security realm to the commercial one; the decision regarding transit involves not only the safety of the vessel but also insurance, financing, and maritime services.
Insurance and Shipping: A Hidden Cost of the Crisis
Security risks drive up insurance and transport costs while increasing the likelihood of delays and the rerouting of ships. The International Monetary Fund confirms that shipping disruptions in the region lead to higher freight and insurance costs and longer delivery times for goods. Consequently, the cost of the Hormuz crisis is not limited to oil prices; it extends to supply chains, commodities, and importing economies.
Oil and Gas Under Pressure from the Strait of Hormuz
The strait represents a major chokepoint for global energy flows; consequently, sustained low shipping volumes are exerting pressure on oil and gas markets. This decline heightens the need for stockpiles and alternative routes. The International Monetary Fund (IMF) has warned that continued flow disruptions could lead to a further depletion of global oil inventories. The situation becomes increasingly critical when the Strait of Hormuz crisis coincides with disruptions to other energy and trade routes.
Pipelines do not fully compensate for Hormuz.
Saudi and Emirati pipelines represent one of the most important alternatives, yet they cannot accommodate the full volumes typically transported via maritime routes. Furthermore, attacks on this alternative infrastructure demonstrate that transporting oil away from the strait does not eliminate risks; rather, it may simply shift them to a different location. While future projects to expand oil export routes offer the potential to reduce reliance on the Strait of Hormuz, they require massive investment as well as long-term security and political stability.
Bab al-Mandab Adds Another Route of Risk
Bypassing the Strait of Hormuz does not eliminate risks; pressures could simply shift to the Bab al-Mandab Strait and the Red Sea or to longer routes around the Cape of Good Hope. This renders the shipping crisis a systemic issue involving an entire network of corridors, rather than a problem confined to a single point—a fact particularly evident given the increased costs of fuel, time, and insurance associated with rerouting.
The Hormuz crisis goes beyond oil.
The repercussions of the disruption in the strait extend to liquefied natural gas (LNG), fertilizers, supply chains, and international trade. The International Monetary Fund (IMF) notes that the Strait of Hormuz is a vital corridor for energy and trade and that persistent disruptions drive up transport costs and increase economic pressures. Consequently, a prolonged slump in shipping activity could transform the maritime crisis into a crisis of prices and supplies that reaches far beyond the Gulf region.
Hormuz does not need a complete closure.
The new equation in the Strait of Hormuz is not based solely on a formal closure. Rising risks, a decline in the number of vessels, increased insurance costs, and restrictions on certain tankers can collectively produce an effect akin to an economic shutdown, even while the waterway remains open. Herein lies the paradox: the Strait of Hormuz might not close completely, yet it could become far less utilized and significantly more expensive—enough to impact oil, gas, shipping, and global trade.
