Shipping grinds to a halt
Vessel traffic through the Strait of Hormuz fell by 70% late Saturday, according to MarineTraffic data, after US and Israeli forces launched strikes on Iran on February 28. More than 150 tankers have dropped anchor in Gulf waters rather than risk the passage.
At least four large oil tankers turned back before entering the strait. Greece told its fleet to stay away. Several major trading houses, including those arranging cargoes for Gulf producers, paused all shipments through the waterway.
The strait is only 33 kilometers wide, with usable shipping lanes narrowing to about 3 kilometers in each direction. Around 20 million barrels of oil pass through daily, roughly a fifth of global supply. About 84% of that crude heads to buyers in Asia.
Iran sends contradictory signals
Iran's Revolutionary Guard Corps broadcast VHF radio messages Saturday telling ships that passage was banned. But hours later, Mohsen Rezai, secretary of Iran's Expediency Council and a former IRGC commander, announced the strait remains open "until further notice."
The mixed messaging has done little to reassure tanker operators. Two vessels were attacked near the chokepoint over the weekend, according to Oman's coast guard, and reports of Iranian navy patrols have kept insurers on edge.
What a prolonged closure would mean
OPEC+ approved a 206,000 barrel-per-day output increase for April just hours after the strikes began. But extra barrels mean nothing if they cannot reach open water.
Jorge León at Rystad Energy put it bluntly: markets care far more about whether barrels can physically move than about spare capacity on paper. A sustained blockage would strand exports from Saudi Arabia, Iraq, Kuwait, the UAE, Qatar, and Iran itself.
Brent crude traded at $78.88 per barrel and WTI at $72.21 early Sunday, both up sharply from Friday's close. Analysts warn prices could gap higher still if traffic does not resume within days.