A slight increase in ship traffic through the Strait of Hormuz suggests a complex, partial reopening rather than a full return to normal.
Recent observations show about 15 ships crossing the strait, which is only about 11% of the pre-war average. This isn't a simple case of 'open versus closed.' Instead, a 'two-track' system is emerging. Iran is allowing vetted, 'friendly' vessels to pass through specific, protected coastal channels like the Qeshm-Larak corridor, while the broader waterway remains a high-risk zone. Some of these ships are even traveling 'dark' with their tracking systems off to avoid detection.
To understand how we got here, we need to look back. First, the conflict began on February 28 with US-Israeli air strikes on Iran, which led to a near-total shutdown of the strait. Second, this triggered a massive supply shock, causing Brent crude oil to spike above $107 per barrel. This price surge prompted a major policy response: the International Energy Agency (IEA) announced a coordinated release of 400 million barrels from emergency reserves. Third, this action helped calm immediate fears of scarcity, creating breathing room for diplomatic back-channels to work. These negotiations allowed Iran to begin selectively permitting passage, starting with a Pakistani tanker in mid-March and, more recently, a French-linked ship.
However, significant hurdles remain. While these selective passages are a positive sign, the broader military and financial risks are still extremely high. The United States continues to push for military authorization at the UN, raising local fears of a ground operation. At the same time, war-risk insurance premiums for ships have skyrocketed to as much as 7.5% of a ship's value, making transit prohibitively expensive for most. This is why experts expect a 'saw-tooth recovery'—periods of gradual reopening that could be suddenly reversed by new incidents.
In essence, today's news reflects a fragile balance. It's a pragmatic, multipolar approach where back-channel deals allow for a trickle of commerce, even as the loud drums of war continue to beat in the background. The situation remains tense, with the path to normalization dependent on both diplomacy and the avoidance of miscalculation.
- Strait of Hormuz: A narrow waterway connecting the Persian Gulf to the open ocean, through which a significant portion of the world's oil supply passes.
- VLCC (Very Large Crude Carrier): The largest class of oil tankers, capable of carrying around 2 million barrels of oil.
- Risk Premium: An additional amount included in the price of an asset (like oil) to compensate investors for bearing extra risk, such as potential supply disruptions from conflict.