For the seventh consecutive day, theStrait of Hormuzis effectively closed to normal commercial shipping. In the past 24 hours, vessel-tracking data compiled by Bloomberg shows only one Iran-linked bulk carrier crossing out of the Persian Gulf. The last commercial ship with no apparent connection to Iran to pass through the strait was the Chinese-owned bulk carrier Sino Ocean, which made the crossing on Saturday morning. Since then, no vessel has passed through the Strait of Hormuz.
So, what has been the result of this? When one of the world's most critical energy chokepoints shuts down, markets notice.
Brent crude, the global oil benchmark, touched $110 a barrel when markets opened Sunday. It was the first time prices had crossed $100 in nearly four years, and it represents an increase of around 50 percent since theUS and Israeli strikes on Iranbegan on February 28th.
President Trump addressed the surge directly in a Truth Social post Sunday, describing the higher prices as a short-term problem and insisting they were "a very small price to pay for U.S.A., and World, Safety and Peace." He added: "ONLY FOOLS WOULD THINK DIFFERENTLY." Markets, for now, appear unconvinced that short-term is as short as the American president is suggesting.
When the Strait of Hormuz shuts down, everything gets backed up. Storage tanks reach their limit. Refineries have to reduce output because crude oil can't reach them. And oil-producing countries, unable to export their supply, are forced to pump less.
That is exactly what is happening right now. Iraq has been forced to reduce production. Kuwait and the UAE have followed. Saudi Arabia has been rerouting shipments through its Red Sea terminals at record levels to compensate, but it can only do so much. By Friday, tracking data showed just nine empty supertankers remaining in the Gulf. The pipeline, in practical terms, is running dry.
Widespread signal interference and deliberately disabled transponders around the Strait of Hormuz have made real-time tracking genuinely unreliable. Ships can move through the strait without broadcasting their position, and they often don't reappear on satellite tracking feeds until days later, sometimes not until they've reached the Strait of Malacca, roughly ten days of sailing from Hormuz.
Iran-linked tankers in particular have a long history of running dark until they're well clear of the region. Other operators appear to be adopting similar tactics in the current environment.
What this means practically is that the traffic figures being reported, including the near-zero crossing numbers above, may not capture the full picture. Some transits may have happened and simply haven't shown up yet.
Second, the insurance problem needs to be solved. The cost of covering a vessel through the strait has become prohibitive. The Trump administration has proposed backing up to $20 billion in losses through the US International Development Finance Corp, and the US Navy has announced plans to escort tankers through. Shipping analysts say the insurance commitment may need to be larger.
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