Even If Hormuz Reopens, Shipping Will Still Price in Risk

A U.S.-Iran memorandum of understanding signed yesterday, if implemented, could mark a major economic turning point after about 110 days of war. But oil markets are not relying on declarations about the Strait of Hormuz alone. They want to know how many ships will actually pass, who will insure them, and how long it will take to clear the bottleneck. In 2024, about 20 million barrels a day of oil and refined products moved through Hormuz, along with a major share of global LNG, mainly from Qatar.

The immediate oil-price reaction was sharp, with Brent falling to about $82 a barrel as the fear factor receded. Still, the article says normalization is not a technical switch. It is a commercial, insurance, logistical and political process that could move much more slowly. Shipping companies must decide whether to reenter the area, insurers must reset war-risk premiums, Asian refineries must know whether cargoes will arrive, and traders must rebuild contracts. The biggest buyers are in China, India, Japan and South Korea.

Lloyd’s List said roughly 200 oil and refined-product tankers, not linked to Iran’s shadow fleet, were trapped in the Gulf at the height of the crisis, including about 60 very large crude carriers of roughly 2 million barrels each. AXSMarine reported only 140 outbound commercial transits through Hormuz from May 4 to June 10, or about 220 round-trip movements including entries, versus 2,155 outbound transits in the same period in 2025. That means outbound traffic was only 6% to 7% of normal, while non-Iranian traffic recently remained more than 90% below usual levels.

The disruption also hit refined products and insurance. S&P Global Commodity Insights said about 40 tankers carrying diesel, jet fuel, naphtha and other refined cargoes were stuck at one point. War-risk premiums, which had reached 2.5% of a ship’s value, fell to about 1% by late March, but that was still far above prewar levels, and some trapped tankers paid as much as 10%. In one case, a Suezmax tanker faced a $7.5 million premium, more than its estimated $6.5 million voyage cost.

The wider impact reached food, fertilizers and industry. Data Lab, a WTO analytics unit working with AXSMarine, found a 95% drop in crude flows through Hormuz, a 99% drop in LNG exports and an 87% drop in fertilizer-related cargoes. China, which gets up to 40% of its oil and about 30% of its LNG through the strait, was also affected: before the war, 49 China- or Hong Kong-flagged vessels passed between February 23 and 28, but since March 1 only two China-flagged ships were seen, while 55 remained trapped in the Gulf.