The temporary 60-day truce at the Strait of Hormuz has not truly unraveled the global energy and shipping knot. As of June 23, 162 fully loaded crude oil tankers with trackable AIS signals remained congested in and around the strait, carrying approximately 120 million barrels of crude oil. When including 'dark ships' that deliberately disable positioning signals, the actual backlog is even larger. Current daily vessel transits are still less than 60% of pre-conflict levels, creating a standoff where ships 'can go but dare not, want to go but have to queue.'
This gridlock has directly transmitted to international oil prices: WTI crude closed at $73.21 per barrel, Brent at $76.85, with June cumulative losses nearing 16%, rapidly eroding the geopolitical risk premium built up since the conflict erupted. Multiple institutional analysts caution that the current price correction is more about short-term sentiment than a fundamental reversal. The 60-day truce remains highly fragile, with unresolved differences among parties and a real risk of sudden escalation.
High Shipping Costs: War Risk Insurance as the Red Line
Even with the truce in place, war risk insurance premiums—the core obstacle for shipowners returning to the Strait—remain far above pre-conflict levels. Current premiums along the Strait, though down from their peak, still hover around 1% of vessel hull value, a tenfold increase from the pre-conflict rate of 0.1%. For a typical VLCC, a single transit through the Strait costs up to $2 million in war risk insurance, severely eroding shipping profits.
Shipowners are adopting conservative strategies: some mid- and small-size operators are rerouting via the Cape of Good Hope, increasing voyage length, fuel, and crew costs; major lines are only deploying a few vessels on trial runs, unwilling to commit large capacity to the Persian Gulf. Until war risk premiums return to normal, Strait shipping efficiency and global crude transport turnover will remain impaired.
Transmission to Textiles: Undercurrents in Chemical Fiber Costs
Crude oil is the upstream feedstock for polyester, nylon, and polypropylene fibers. The current sharp price drop may temporarily ease raw material procurement for chemical fiber producers, but two risks warrant attention:
- The truce is fragile; any new incident—such as attacks on vessels or channel blockades—could quickly re-inflate risk premiums, triggering an oil price rebound. Refineries and traders should not base long-term procurement decisions solely on short-term price declines.
- Shipping congestion means actual crude arrivals may fall short of expectations, potentially tightening regional supply of intermediates like PTA and MEG, thus pushing up chemical fiber costs.
For downstream weaving and dyeing mills, raw material cost transmission lags, but sustained high oil prices will inevitably pressure synthetic fabric prices upward.