Navigation in the Strait of Hormuz is slowly resuming, but it is far from returning to normal. After the 60-day temporary ceasefire between the U.S. and Iran, this critical chokepoint for global crude oil transport has seen partial recovery. However, 120 million barrels of stranded crude and persistently high war risk insurance premiums mean a full shipping rebound remains a distant goal.
Congestion and Backlog: 162 Tankers and 120 Million Barrels of Crude
As of June 23, industry data shows that 162 laden crude tankers with AIS signals were stranded in the strait and surrounding waters, carrying approximately 120 million barrels of crude and refined products. This figure excludes numerous 'dark ships' that have voluntarily turned off their positioning signals—hidden Iranian-linked tankers and small/medium product tankers—suggesting the actual backlog is even larger.
Compared to pre-conflict levels, the current daily number of transiting vessels is still less than 60% of normal. Shipowners are adopting a cautious resumption strategy rather than large-scale transit. On one hand, they await further confirmation of waterway safety; on the other, uncertainties over insurance, demurrage, and diversion costs have created a congestion stalemate where ships 'can go but dare not, and those that want to go must queue.' In the short term, the accumulated capacity inventory of several months is unlikely to be quickly absorbed.
Oil Prices Plunge 16%: Sentiment-Driven but Fundamentals Lurk
Markets have already priced in expectations of strait navigation recovery and crude supply restoration. On June 23, WTI crude closed at $73.21/barrel and Brent at $76.85/barrel, each down about 1% for the day. For the entire month of June, both benchmarks fell nearly 16%, rapidly unwinding the geopolitical risk premium built up since the conflict began.
However, multiple institutional analysts caution that the current price correction is more short-term sentiment release than a fundamental reversal. Bloomberg Intelligence analyst Lee Klaskow noted that the 60-day temporary ceasefire is highly unstable, with deep disagreements among Middle Eastern parties unresolved, leaving the situation prone to sudden deterioration. From a pricing logic perspective, the recent decline has already discounted short-term navigation repair benefits. Should the strait see renewed attacks, channel controls, or diplomatic escalation, the outflow of stranded crude would be interrupted again, and risk premiums would quickly rebound. Refineries and traders should not base medium-term procurement costs solely on short-term price drops.
War Risk Premiums Remain High: The Core Hurdle to Shipping Recovery
The rise in insurance costs due to geopolitical conflict is the core pain point preventing shipowners from fully returning to the Hormuz route. Even with eased tensions, premium rates remain far above pre-conflict norms. Current war risk insurance rates along the strait, though down from conflict peaks, still stand at 1% of vessel value, compared to the pre-conflict rate of 0.1%—a tenfold increase in cost.
For a very large crude carrier (VLCC), a single transit through the strait incurs war risk premiums of up to $2 million. This massive expense significantly erodes shipping profits, leading shipowners to adopt conservative operational strategies. Some small and medium owners choose to divert around the Cape of Good Hope, lengthening voyages and increasing fuel and labor costs; major shipping firms deploy only a few trial vessels and are reluctant to send large-scale capacity into the Persian Gulf. Unless war risk rates return to normal, strait shipping cannot restore its pre-conflict transit efficiency, and global crude transport turnover will continue to suffer.
Upstream Impact on the Textile Industry: Uncertainty in Chemical Fiber Costs
For the textile industry, the shipping stalemate in the Strait of Hormuz directly affects chemical fiber raw material costs. Crude oil is the core feedstock for synthetic fibers like polyester and nylon, and oil price fluctuations quickly transmit to intermediates such as PTA and MEG, subsequently impacting the ex-factory prices of polyester filament and staple fiber.
Although oil prices have recently fallen, the geopolitical risk premium could rebound at any time. This means chemical fiber procurement costs will face high uncertainty in the next two months. If tensions re-emerge in the strait, oil prices could rise rapidly, pushing up polyester and other chemical fiber prices. Textile companies, especially those procuring chemical fibers, should be wary of this potential 'fall first, rise later' risk and avoid overly optimistic stockpiling at low prices.