Shipping through the Strait of Hormuz has nearly stopped as the US naval blockade and Iran’s response disrupt one of the world’s key oil routes, pushing markets into uncertainty.
Shipping through Hormuz nearly comes to a standstill
Traffic through the Strait of Hormuz has become almost impossible. In recent days, six tankers carrying Iranian crude were forced to turn back to Iran due to the US naval blockade.
Ship-tracking data highlights the scale of the disruption. The conflict in Iran is now severely impacting one of the world’s most critical routes for oil exports, a chokepoint that also matters for energy-importing regions such as Sub-Saharan Africa, where fuel price exposure is particularly high.
Two weeks ago, Donald Trump imposed a naval blockade on vessels linked to Iran. In response, Tehran has deployed its “mosquito fleet”, small armed speedboats used to obstruct maritime traffic.
Both the United States and Iran are now trying to control Hormuz. The result is near-zero traffic and volatile oil prices, while diplomatic talks remain stalled.
Tanker movements collapse, oil flows disrupted
Before the conflict escalated, between 125 and 140 vessels crossed the strait every day. According to tracking data from Kpler and satellite analysis by SynMax, reported by Reuters and updated on April 27, only seven vessels managed to pass in a single day.
None of them were carrying oil destined for global markets.
The six tankers forced to return to Iranian ports were transporting around 10.5 million barrels of crude, based on satellite estimates from TankerTrackers.com.
Power struggle fuels uncertainty in global markets
The US naval blockade is extending the timeline for any resolution, while Iran has intensified efforts to block the passage.
Hundreds of vessels and nearly 20,000 seafarers remain stranded inside the Gulf.
“What the United States is doing appears to have expanded the risk area for ships,” said Rajalingam Subramaniam in an interview with Bloomberg. “This show of force has effectively created greater uncertainty.”
Gulf oil production drops by 57%
Crude production in Persian Gulf countries is already 57% below pre-war levels, according to analysts at Goldman Sachs, including Daan Struyven.
Returning to previous output levels could take months, even if the strait were fully reopened and no further attacks occurred.
Demand destruction is already emerging in gas markets, while fertilizer shortages are expected to significantly impact food production and prices for the rest of the year and possibly beyond. This dynamic is particularly relevant for African economies that rely heavily on imported fertilizers and energy inputs.
A new normal for oil prices?
One scenario is that current high oil prices could become the new baseline.
Suvro Sarkar told Reuters that the situation may evolve into a prolonged ceasefire limbo, with oil prices fluctuating between 100 and 125 dollars per barrel.
“Without an immediate agreement, and with an indefinite ceasefire that offers no certainty on reopening the strait, oil prices will continue trending upward as physical markets align with paper markets. Eventually, financial markets will begin to normalize the war. This will reduce volatility but establish a higher price floor.”
