The partial resumption of navigation in the Strait of Hormuz has not brought a full recovery to the shipping market.
Oil Price Plunge: Short-Term Sentiment Overdraft
On June 23, WTI crude closed at $73.21/barrel and Brent at $76.85/barrel, both falling about 1% in a single day; over the entire month of June, the two benchmarks accumulated declines of nearly 16%. The market has quickly priced in the navigation repair expectations from the US-Iran 60-day temporary ceasefire, rapidly erasing the geopolitical risk premium accumulated during the conflict.
However, industry analysts generally believe the current price correction is more a release of short-term sentiment than a fundamental reversal of supply-demand dynamics. Bloomberg Intelligence analyst Lee Klaskow pointed out that the temporary ceasefire agreement is highly fragile, with fundamental disagreements among Middle Eastern parties unresolved, leaving the geopolitical situation prone to sudden deterioration. Should incidents such as ship attacks or channel controls reoccur, the outflow of accumulated crude would be interrupted again, risk premiums would quickly re-emerge, and oil prices could stage a phased rebound.
For refineries and traders, using short-term price drops to judge medium- to long-term procurement costs may involve significant pricing risk.
Shipping Recovery Stuck on Insurance Costs and Congestion Gridlock
As of June 23, industry data shows 162 fully laden crude oil tankers with trackable AIS signals were stranded in the strait and surrounding waters, carrying a total of about 120 million barrels of crude and refined products. More alarmingly, a large number of Iran-linked tankers and small/medium product tankers have voluntarily turned off positioning signals to evade tracking, becoming hidden "black ships" — meaning the actual number of stranded vessels and accumulated oil is far higher than reported statistics.
Current daily vessel transits through the strait remain below 60% of pre-conflict normal levels. Shipowners are generally adopting a cautious resumption strategy rather than large-scale concentrated transit. They are waiting for further confirmation of channel safety while assessing comprehensive cost changes including insurance, demurrage, and diversion — resulting in a gridlock where ships "can go but dare not, want to go but have to queue." This makes it difficult to quickly digest months of accumulated capacity inventory in the short term.
War risk insurance premiums are the core obstacle preventing shipowners from fully returning to the Strait of Hormuz route. Current war risk rates along the strait, though down from conflict peaks, remain at around 1% of vessel value — a tenfold increase from the pre-conflict norm of 0.1%. For a typical very large crude carrier (VLCC), a single transit through the Strait of Hormuz incurs war risk premiums of up to $2 million, significantly eating into shipping companies' profits.
Global Crude Transport Turnover Remains Under Pressure
With multiple cost overlays, shipowners' operational decisions have turned conservative. Some small and medium shipowners choose to bypass the strait via the Cape of Good Hope, lengthening voyages and increasing fuel and crew costs; leading shipping companies only deploy a few vessels for trial transits, unwilling to commit large capacity into the Persian Gulf. As long as war risk rates fail to return to normal levels, strait shipping cannot recover to pre-conflict circulation efficiency, and global crude transport turnover efficiency will continue to suffer.
This directly pressures Asian refineries dependent on Middle Eastern crude. Extended raw material arrival cycles and rising procurement cost uncertainty force some enterprises to adjust buying rhythms, increase strategic reserves, or shift to alternative supply sources such as West Africa or the Americas.