Shipping rebounds in Strait of Hormuz one week after U.S.-Iran deal – but fragile confidence threatens recovery

• Daily traffic reached only 53% of previous year levels despite recovery, as competing Iranian and U.S.-Omani routing authorities create confusion with no agreed navigation rules
• War-risk insurance premiums have surged from 0.05% to over 0.7% of hull value per transit, creating severe business model stress for shipping companies
• Saudi Arabia remains notably absent from Gulf exports, routing all shipments through Yanbu in the Red Sea instead of risking Strait passage

Summary

Key Development: Shipping traffic through the Strait of Hormuz is recovering one week after a U.S.-Iran interim peace deal, but a renewed attack on June 24 has cast doubt on the fragile recovery.

Traffic Data:

• 125 transits recorded between June 15-21, the highest weekly total since the conflict began in late February
• June 24 saw the highest single-day count since the war started, but still only 53% of traffic compared to the same day last year
• The strait normally handles 20% of global oil traffic

Critical Incident: The Ever Lovely, a Singapore-flagged Evergreen container ship, was struck by a projectile off Oman's coast on Thursday. A U.S. official attributed the attack to Iran's Islamic Revolutionary Guard Corps (IRGC)—the first attack on a cargo vessel since the ceasefire began.

Operational Challenges:

• Two competing authorities: Iran controls a northern corridor; the U.S. and Oman oversee a southern passage
• The standard pre-war commercial lane remains closed due to mines
• Insurance premiums have surged from 0.05% to over 0.7% of hull value per transit

Market Impact:

• Crude oil shipments from Kuwait and UAE are increasing, but Saudi Arabia continues routing exports through the Red Sea's Yanbu port instead
• Companies face a strategic dilemma: transit and risk assets/relationships, or delay and lose market position to competitors
• The 60-day truce window creates urgency for moving stored Gulf crude

Outlook: Industry leaders emphasize that without clear safety guidelines and resolution on jurisdictional authority, many shipowners will remain cautious despite competitive pressures to resume operations.