The partial navigation recovery in the Strait of Hormuz has not led to the expected influx of stranded oil into global markets. As of June 23, 162 fully loaded tankers with trackable AIS signals remained stranded, carrying approximately 120 million barrels of crude and refined products. Notably, many Iran-linked tankers and smaller product tankers have deliberately turned off their positioning signals, becoming 'dark ships,' indicating that the actual backlog is far larger than reported data suggests. Congestion, not clearance, defines the current state of the strait.
Background
After the 60-day temporary ceasefire between the US and Iran, vessel traffic in the Strait of Hormuz gradually recovered, and international crude oil prices fell sharply. On June 23, WTI crude closed at $73.21/barrel, and Brent crude at $76.85/barrel, both down about 1% for the day, with cumulative declines of nearly 16% for the month. However, the expected rapid release of backlogged oil did not materialize, as daily transit vessel numbers remain below 60% of pre-conflict levels.
Shipowners are adopting cautious trial navigation rather than large-scale resumption. They await further confirmation of channel safety while weighing comprehensive costs including insurance, demurrage, and rerouting. This 'can go but dare not, want to go but queue' deadlock means accumulated capacity cannot be quickly digested. For the textile industry, this implies cautious expectations for imported chemical fiber raw material costs like PTA and polyester.
Industry Impact
High war risk insurance premiums are the core obstacle to shipping recovery. Current war risk rates in the strait, while down from peak conflict levels, remain around 1% of hull value, ten times higher than the pre-conflict rate of 0.1%. For a very large crude carrier (VLCC), a single transit costs up to $2 million in war risk premiums, severely eroding shipping profits.
This cost pressure is cascading down the supply chain. Some small and medium shipowners are rerouting via the Cape of Good Hope, increasing voyage length, fuel, and labor costs; major shipping lines are only deploying a few vessels for trial passages. Until war risk rates normalize, strait shipping cannot return to pre-conflict efficiency. For refineries relying on Middle Eastern crude, longer procurement cycles and higher logistics costs are inevitable in the short term.
The recent oil price decline has already priced in the short-term navigation recovery benefit. Should the strait face fresh incidents like ship attacks or channel control, the backlogged oil outflow would be interrupted again, risk premiums would quickly rebound, and oil prices could see a staged rally. Refineries and traders should not judge medium- to long-term procurement costs solely on short-term price drops.