No large tankers tracked entering the Middle East Gulf in past two days
TRAFFIC is transiting the Strait of Hormuz, but the flow of energy out and the supply of tonnage in has reduced to a trickle.
No tankers larger than 10,000 dwt have transited westbound into the Middle East Gulf since March 3, Lloyd’s List Intelligence data shows.
Since March 1, the day after US-Israeli attacks began, just five tankers (including three crude oil tankers) above 10,000 dwt have made the voyage westbound. Nine tankers above 10,000 dwt have transited eastbound in that timeframe.
Iranian forces have reiterated that the strait is under their control and closed to commercial traffic, even threatening to strike US, Israel or Europe-linked vessels.
But this has not translated into a full and total closure. Traffic has been moving through the chokepoint, but the flow has slowed considerably.
Just six vessels of any type larger than 10,000 dwt have made the voyage westbound since March 4, four of which were sanctioned ships linked to Iran.
In fact, since March 3, half of transits in either direction were made by sanctioned or shadow fleet* ships.
It is possible more vessels have made the voyage either eastbound or westbound with their automatic identification system turned off.
While the Iranian Revolutionary Guard Corps Navy may not have physically mined or obstructed the Strait of Hormuz, attacks on ports and vessels in the region have proved enough to deter the majority of shipowners from sending their vessels in or out of the strait.
The first five days of February saw 561 vessels transit the Strait of Hormuz in either direction. The same period in March has seen just 46 ships make the trip, a 91% drop.
Crucially, three vessels that have made the trip into the Middle East Gulf are tankers owned by the Prokopiou family.
All three are now laden and heading eastbound towards the Strait of Hormuz. Should they safely make the trip through the chokepoint and out of the Middle East Gulf, more owners may well be tempted to send vessels to the region.
As Lloyd’s List’s marine insurance editor David Osler told today’s webinar on the crisis, war risk underwriters remain ready to provide cover for vessels that wish to undertake the voyage, albeit at vastly increased premiums.
Those tankers are in real demand too. The big energy exporting nations in the region do have storage facilities for crude oil, but in some cases not much.
Iraq has already begun to wind down its crude production as a result of the tanker shortage. Basra Oil Terminal has requested a 100% reduction from the South Rumaila oil field, a move which would remove more than a third of Iraq’s output.
A report by investment bank JP Morgan said both Kuwait and the UAE had weeks of storage capacity left before production that would need to be curtailed.
Qatar’s energy minister warned that oil could reach $150 per barrel in two or three weeks if tankers cannot transit the Strait of Hormuz. Gas prices could also reach $40m per million British thermal units — nearly four times their pre-war level, he warned.
QatarEnergy declared force majeure and has halted production of LNG this week due to attacks on its facilities at Ras Laffan and Mesaieed. Meanwhile, images of Fujairah’s oil facilities on fire have circulated too, though the port itself remains operational.
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