The ceasefire signal at the Strait of Hormuz has not brought relief to global energy and shipping markets. After the US-Iran 60-day temporary ceasefire, ship passages partially recovered, but a backlog of 120 million barrels of crude and persistently high war risk insurance premiums are two hard barriers to shipping recovery.
Tanker Backlog and Dark Ships Underestimate Real Congestion
As of June 23, industry data shows 162 laden crude oil tankers with AIS signals stranded in and around the strait, carrying about 120 million barrels of crude and products. This excludes 'dark ships' that disable positioning signals—many Iran-linked tankers and small product tankers are hiding, meaning the actual backlog is larger.
Compared to pre-conflict levels, daily transits are still less than 60% of normal. Shipowners are taking a cautious approach: waiting for safety confirmation and assessing costs like insurance, demurrage, and detours. This creates a 'can't go, don't want to queue' gridlock, making it hard to clear months of accumulated capacity soon.
Oil Prices Drop, but Geopolitical Risk Premium Remains
Markets priced in the navigation recovery and supply restoration expectations. On June 23, WTI closed at $73.21/barrel, Brent at $76.85/barrel, both down about 1%; June saw a cumulative drop of nearly 16% for both benchmarks, rapidly unwinding the geopolitical risk premium built since the conflict began.
However, multiple analysts warn this is more short-term sentiment than a fundamental reversal. Bloomberg Intelligence analyst Lee Klaskow noted the 60-day ceasefire is highly fragile, with deep disagreements unresolved. If incidents like ship attacks or channel controls recur, the backlog release will stall, and risk premiums will spike again.
War Risk Insurance: The Core Hurdle to Shipping Recovery
The high cost of war risk insurance is the key barrier preventing shipowners from fully returning to Hormuz routes. Current rates, though down from their peak, remain at 1% of hull value—10 times the pre-conflict 0.1%. For a VLCC, a single transit can cost $2 million in war risk premiums, severely squeezing profits.
Shipowners are conservative: some small operators detour via the Cape of Good Hope, increasing fuel and labor costs; major lines only send a few trial vessels. Until insurance rates normalize, the strait won't see pre-conflict transit efficiency, and global crude transport efficiency will remain impaired.
Implications for Textile Raw Material Procurement
While textiles aren't direct crude consumers, oil price swings quickly transmit through PTA, polyester filament, and staple fiber chains to fabric costs. The current price drop offers short-term relief for chemical fiber buyers, but the ceasefire's fragility means raw material costs could fluctuate in coming months.
For textile firms reliant on imported raw materials, it's wise to monitor Middle East developments closely and avoid bulk purchases based solely on short-term price dips. Shipping disruptions could also delay raw material arrivals, so maintaining safety stocks is prudent.