Strait of Hormuz Remains Closed After June Truce Collapses; U.S. Strikes Iranian Forces

The U.S. military launched strikes on Wednesday targeting Iranian forces in the Strait of Hormuz region. The action followed the collapse of a June 17 truce that had briefly reopened the waterway after an Iranian closure and U.S.

Blockade. The International Maritime Organization stated on Wednesday that the strait is too dangerous for commercial vessels to transit. Weeks earlier the organization had announced an evacuation program to rescue seafarers trapped inside the Persian Gulf.

Gulf producers that once moved one-fifth of the world’s hydrocarbons through the strait are now pursuing alternatives. The United Arab Emirates is planning a new port and container terminal on its east coast in the Fujairah area, with DP World developing the project. The UAE has also used tankers to move crude from inside the strait to waters outside for transfer to larger ships bound for Asia.

Saudi Arabia is diverting about four million barrels a day of crude via its 750-mile east-west pipeline to Yanbu on the Red Sea. Hapag-Lloyd has adjusted its network so its ships do not transit the Strait of Hormuz until further notice. The company routes Gulf cargo through ports including Salalah, Jeddah, Khorfakkan, and Sharjah using third-party feeder services, land bridges, and inland connections.

"These solutions allow us to maintain connectivity to markets in the Gulf region. However, they are more complex and less efficient than regular maritime services through the Strait and may result in longer transit times, additional handling, and reduced capacity," Leon Schulz, a Hapag-Lloyd spokesperson, said.

A handful of ships passed through the strait in recent days with transponders turned off.

All six commodity carriers that transited on Sunday did so dark, Kpler data analyzed by Bloomberg showed. Shipping flows through the strait were slow to resume even after the now-defunct truce due to security risks and scheduling inertia. "Major shipping operators have established overland routes to help alleviate the backlog around the strait, while Gulf states are preparing longer term strategies—such as new pipeline and port development projects," Tamsin Hunt of S-RM said.