International oil prices fell about 1% on June 23, with WTI closing at $73.21/barrel and Brent at $76.85/barrel. Both benchmarks have dropped nearly 16% in June after the US-Iran 60-day temporary ceasefire agreement brought partial navigation recovery in the Strait of Hormuz. For the textile industry, however, this oil price correction feels more like a temporary respite than a fundamental relief from cost pressures.
The Illusion of Navigation Recovery: Congestion Persists
The Strait of Hormuz handles nearly 20% of global crude oil seaborne trade, and its transit conditions directly determine international crude pricing, tanker operating costs, and feedstock supply for global refineries. As of June 23, 162 fully loaded crude oil tankers with traceable AIS signals were stranded in or near the strait, carrying a total of about 120 million barrels of crude. More critically, a large number of Iran-linked tankers and small/medium product tankers have deliberately turned off their positioning signals, becoming "dark ships"—the actual volume of stranded vessels and oil is significantly higher than reported data.
Current daily vessel transits through the strait remain below 60% of pre-conflict normal levels. Shipowners are adopting a cautious, trial-based approach rather than large-scale concentrated navigation. This has created a congestion stalemate where vessels are "able but unwilling to go, and those willing to go have to queue." As a result, the accumulated crude oil inventory is unlikely to flow quickly into the global market, limiting the supply elasticity of textile raw materials.
War Risk Premiums: The Core Obstacle to Shipping Recovery
Even with the easing of tensions, war risk insurance premiums remain at about 1% of vessel value, compared to just 0.1% before the conflict—a tenfold increase. For a typical Very Large Crude Carrier (VLCC), a single transit through the Strait of Hormuz now costs up to $2 million in war risk premiums. This huge expense significantly erodes shipping companies' profits and directly pushes up the marginal cost of global crude oil transportation.
Shipowners are adopting conservative operational strategies: some small and medium-sized operators choose to reroute via the Cape of Good Hope, increasing voyage length, fuel, and labor costs; major shipping companies are only deploying a few vessels for trial transits, unwilling to commit large-scale capacity to the Persian Gulf. As long as war risk premiums fail to return to normal levels, the shipping efficiency of the Strait of Hormuz cannot recover to pre-conflict standards, and global crude oil transport turnover will remain under pressure.
Impact on Textile Raw Material Costs: Short-Term Sentiment vs. Long-Term Risk
Crude oil is the core upstream feedstock for chemical fibers (polyester, nylon, polypropylene, etc.). The current oil price correction is more of a short-term sentiment release following the ceasefire announcement than a fundamental reversal of market fundamentals. Bloomberg Intelligence analyst Lee Klaskow has already warned that the 60-day temporary ceasefire is highly unstable, with deep-seated disagreements among parties in the Middle East unresolved, and the geopolitical situation could deteriorate at any time.
From a pricing logic perspective, this round of oil price declines has already priced in the short-term navigation recovery. Should any sudden event occur—such as renewed attacks on vessels, channel blockades, or escalation of diplomatic conflicts—the process of shipping out accumulated crude would be interrupted again, and the risk premium would quickly rebound. For textile supply chain buyers, judging long-term procurement costs solely based on short-term price drops is likely a trap.