Tension in the Strait: Global Shipping at Crossroads

Maritime activities in the Strait of Hormuz face significant disruptions as tanker owners and trading houses halt shipments following Iran's closure of the strait. With 20% of global oil passing through the area, the situation jeopardizes global energy markets, impacting oil and LNG exports by major producers.

Maritime activities in the Strait of Hormuz have come to a standstill, as several tanker owners, oil majors, and trading houses have halted shipments of crude oil, fuel, and liquefied natural gas. The suspension follows recent military action by the U.S. and Israel against Iran, prompting Tehran to enforce the closure of the strategic waterway, according to trading sources on Saturday.

A top executive at a major trading desk confirmed, "Our ships will stay put for several days." Satellite imagery from tanker trackers indicates a concentration of stationary vessels near major ports, including Fujairah in the United Arab Emirates. The vessels are refraining from moving through Hormuz after Iran's Revolutionary Guards issued VHF transmissions declaring, "no ship is allowed to pass the Strait of Hormuz," as reported by an official with the EU naval mission Aspides to Reuters.

The UK Navy has stated that Iran's directives are not legally binding and has advised vessels to navigate the region cautiously. Meanwhile, the U.S. Navy and tanker association INTERTANKO have warned ships to avoid the area, citing potential safety risks. Greece's shipping ministry issued a similar advisory. The disruption affects around 20% of global oil trade, crucially impacting exports from Gulf producers and posing risks to Qatari LNG shipments.

(With inputs from agencies.)