The temporary truce in the Strait of Hormuz triggered a sharp drop in international oil prices on June 23, with WTI crude closing at $73.21/barrel and Brent crude at $76.85/barrel, both falling about 1% in a single day, and cumulative declines of nearly 16% in June. However, this price correction appears more like an emotional release than a fundamental reversal in supply and demand.
The geopolitical risk premium that had been built into oil prices is quickly fading, but industry participants should not be misled by short-term declines. Multiple institutional analysts point out that the fragility of the 60-day truce means any unexpected event could trigger a rebound. For the textile industry, crude oil as the upstream feedstock for synthetic fibers directly impacts costs of polyester, nylon, and other materials, which then transmit to fabric and garment sectors.
Shipping congestion unresolved, tanker backlog exceeds 120 million barrels
As of June 23, 162 fully loaded crude oil tankers with trackable AIS signals remained stranded in and around the Strait of Hormuz, carrying approximately 120 million barrels of crude. More alarmingly, this figure does not include numerous 'black ships' that have turned off their positioning signals—Iranian-linked tankers and small-medium product tankers choosing to sail invisibly—meaning the real backlog could be significantly higher.
The current average daily vessel transits through the strait are less than 60% of pre-conflict levels. Shipowners are adopting a cautious resumption strategy rather than large-scale concentrated transit. On one hand, they await further confirmation of safe passage; on the other, they monitor changes in comprehensive costs including insurance, demurrage, and diversion, creating a congestion stalemate where vessels 'can go but dare not, want to go but must queue.' This situation makes it difficult to digest months of accumulated capacity in the short term, continuing to suppress global crude transport efficiency.
War risk premiums 10 times normal, shipowners turn conservative
The increase in insurance costs due to geopolitical conflict is the core obstacle to a full shipping recovery. Current war risk insurance rates along the Strait of Hormuz have fallen from their conflict peak but remain at around 1% of vessel hull value, compared to just 0.1% before the conflict. For a very large crude carrier (VLCC), a single transit through the strait costs up to $2 million in war risk premiums, directly eroding shipping profits.
Shipowner strategies have therefore turned conservative. Some small-to-medium operators choose to reroute via the Cape of Good Hope to avoid the strait, extending voyage distances and increasing fuel and labor costs; major shipping companies only deploy a few vessels for trial transits, unwilling to commit large capacity to the Persian Gulf. As long as war risk rates fail to return to normal, strait shipping cannot restore pre-conflict efficiency, and global crude transport efficiency will remain impaired.
Impact on textile industry: dual-direction volatility in synthetic fiber costs
The drop in crude oil prices is a short-term positive for the textile industry, especially for polyester filament and staple fiber, where costs for PTA and MEG as raw materials are expected to ease. However, shipping congestion-induced supply uncertainty means refinery utilization rates and feedstock supply remain variable. Should geopolitical tensions escalate again, oil prices could rebound quickly, leading to volatility in synthetic fiber prices.
For textile chemical fiber enterprises reliant on imported crude, it is advisable to closely monitor Middle East developments and avoid excessive stockpiling at low oil prices. Meanwhile, high shipping costs may raise landed prices of imported raw materials, requiring companies to assess inventory cycles and procurement timing.