Key Oil Chokepoints Remain Starved of Traffic as Red Sea and Hormuz Tanker Crossings Stay Deeply Depressed
Key Takeaways
- •Commodity vessel crossings through the Bab el-Mandeb strait fell to 18 on Sunday from 28 on Friday, driven by the Houthis' maritime embargo against Saudi Arabia declared on July 20.
- •Strait of Hormuz tanker crossings dropped to 10 vessels on Saturday from 19 on Friday, with only a single liquefied petroleum gas tanker completing transit on Sunday.
- •The UK Maritime Trade Operations reported three additional tanker attacks in the Strait of Hormuz since Saturday, further elevating risks for operators.
- •War risk insurance premiums for vessels transiting the Red Sea and Gulf regions have risen sharply as underwriters price in the threat of missile and drone attacks.
- •Some tanker operators are disabling Automatic Identification Systems to reduce visibility, meaning actual transit figures could be marginally higher than reported data suggests.
Months into the Iran war, tanker traffic through two of the world's most critical oil chokepoints remains deeply depressed, with shipping data confirming that both the Strait of Hormuz and the Bab el-Mandeb strait are operating at a fraction of their pre-conflict capacity. Together, these routes are central arteries for global seaborne crude and liquefied gas, meaning sustained disruption ripples across supply chains from the Gulf to Europe and Asia.
Bab el-Mandeb Crossings Decline Sharply
Commodity vessel crossings through the Bab el-Mandeb strait fell to 18 on Sunday, down from 27 on Saturday and 28 on Friday, according to Kpler data reported by Reuters, citing tanker tracking firms. The decline follows the Houthis' declaration of a maritime embargo against Saudi Arabia on July 20, which opened a new front against the US and its allies and extended tanker attacks into waters beyond the Gulf. The Bab el-Mandeb strait connects the Red Sea to the Gulf of Aden and is a key transit route for vessels sailing between the Mediterranean, via the Suez Canal, and the Indian Ocean.
Two tankers carrying Saudi crude did exit the Red Sea over the weekend, but both operated with their Automatic Identification Systems (AIS) switched off — a common tactic among operators seeking to reduce visibility to potential attackers. One vessel was bound for an undisclosed destination, while the other was headed to India.
Strait of Hormuz: A Shadow of Former Flows
The situation at the Strait of Hormuz, a route that carried roughly a fifth of the world's crude oil and natural gas before hostilities began, is even more pronounced. Crossings fell to just 10 vessels on Saturday, down sharply from 19 on Friday — a figure that itself represented only the highest daily tally since mid-July. Even that relative high remained well short of anything resembling normal pre-war throughput.
On Sunday, only one tanker, carrying liquefied petroleum gas loaded in Iran, completed the Hormuz crossing. A handful of very large crude carriers (VLCCs) carrying Qatari and Das crude did exit or enter the strait on Friday, but the overall scale of activity remains a small fraction of what the chokepoint previously handled.
The UK Maritime Trade Operations (UKMTO) has reported three further tanker attacks in the strait since Saturday, adding to the risk premium facing operators still willing to transit the route.
Risk-Avoidance Behaviour and Insurance Costs
Tankers running with AIS switched off point to elevated risk-avoidance behaviour among operators, a pattern that typically correlates with higher insurance costs and freight premiums. War risk insurance premiums for vessels transiting the Red Sea and Gulf regions have risen sharply since the onset of hostilities, as underwriters price in the elevated threat of missile and drone attacks. Some vessels may have disabled their AIS systems and cannot be immediately accounted for, meaning the true scale of transiting traffic could be marginally understated.
Even allowing for that possibility, the data paints an unambiguous picture: both chokepoints remain far below pre-war throughput levels, with attacks, embargo threats, and operator risk-avoidance combining to keep global energy shipping routes constrained.
With the Houthi embargo on Saudi Arabia now compounding pre-existing Hormuz disruption, the prospect of a prolonged, structurally lower throughput environment across both routes remains the dominant theme for energy traders, regardless of any diplomatic signals emerging from Washington.