Strait of Hormuz Traffic Drops to Six Vessels as U.S.–Iran Negotiations Stall Again
Key Takeaways
- •Only six commodity vessels transited the Strait of Hormuz on Monday, down from a ten-day average of eleven, marking the lowest traffic level in more than two months.
- •A U.S.–Iran memorandum of understanding that briefly improved transit conditions between mid-June and early July is now effectively defunct.
- •Iran has moved to assert control over vessels transiting Hormuz, while Houthi forces have threatened Saudi-linked shipments in the Red Sea and Bab el-Mandeb Strait.
- •Bank of America estimates that only 5 to 10 ships per day are currently passing through Hormuz, compared with approximately 140 before the war.
- •Traffic through Hormuz would need to recover to roughly 80 to 100 ships per day to stabilize energy markets, according to Bank of America's commodities research head Francisco Blanch.
Vessel traffic through the Strait of Hormuz continued its sharp decline on Monday as hopes for a U.S.–Iran negotiated deal faded once again.
Only six commodity vessels transited the Strait of Hormuz in either direction on Monday, down from an average of 11 ships over the preceding 10-day period, according to shipping data from Kpler cited by Reuters on Tuesday.
Of those six vessels, four moved inbound into the Persian Gulf, while two exited outbound, the data showed. The inbound traffic included two empty product tankers. Departing the Persian Gulf were a small LNG carrier and a tanker carrying residual fuel, both transporting energy products to buyers.
At the Bab el-Mandeb Strait — the chokepoint linking the Red Sea to the Arabian Sea — traffic held steady on Monday, matching the 10-day average of approximately 24 vessels transiting the area.
Traffic through the Strait of Hormuz has now fallen to its lowest level in more than two months as security concerns intensify amid repeated attacks on commercial ships and ongoing threats to regional shipping. The Strait of Hormuz is one of the world's most critical energy transit chokepoints, handling roughly a fifth of global oil consumption, and disruptions there have historically sent tremors through energy markets.
A brief window of improved conditions had emerged between mid-June and early July, when traffic through Hormuz rose following the tentative reopening of the chokepoint under what was then a U.S.–Iran memorandum of understanding. That agreement is now effectively dead. By the end of July, traffic across all vessel types, including commodity carriers, had plunged to a two-month low.
The security environment has deteriorated further over the past two weeks. Iran has sought to assert control over vessels transiting the Strait of Hormuz, while the Iran-aligned Houthi movement has threatened Saudi-linked shipments in the Red Sea and the Bab el-Mandeb Strait.
Bank of America warned earlier this week that traffic through Hormuz would need to recover to near pre-war levels — roughly 80 to 100 ships per day — simply to stabilize energy markets. Francisco Blanch, Bank of America's head of commodities and derivatives research, told CNBC on Monday that only about 5 to 10 ships per day are currently passing through the strait, compared with approximately 140 before the war.
By Tsvetana Paraskova for Oilprice.com
