Global Oil Trade Halted as Hürmüz Strait Traffic Drops to Record Low of 14 Ships Amid US-Iran Tensions

The Strait of Hürmüz has been closed indefinitely by the Iranian Revolutionary Guard Corps due to rising tensions with the US. Traffic can only resume if the US military withdraws from the strait and coastal states respect their territorial waters. However, only 14 commercial vessels passed through the strait yesterday. These included the Humanity carrying 2 million barrels of crude oil from Iran, the Burg Star with 500,000 barrels of dirty fuel, and the Capetan Andreas from Kuwait with 500,000 barrels of dirty fuel. The Minoan Courage, carrying fertilizer from Saudi Arabia to India, also passed through. Most of the other vessels passing through yesterday were reported to be empty. US-Iran tensions had previously led to a 90% drop in daily ship traffic. A ceasefire agreement reached on June 14 had raised ship traffic to above 70 vessels daily, but new attacks and rising tensions have caused a sharp decline in recovery. Before the latest closure, 24 vessels passed through on July 11 and 20 on July 10. The peak traffic under the ceasefire was 76 vessels on June 24. The Strait of Hürmüz, a critical transit point for global trade, had seen acceleration in oil trade post-agreement. However, the latest closure has limited oil trade to Iranian crude only.

The US-Iran conflict poses a significant threat to global oil supply chains, risking higher fuel prices and financial market disruptions. Banks and financial institutions must monitor this situation closely.