With hundreds of vessels still stuck in the Persian Gulf and costs piling up, shipping companies are being whipsawed by uncertainty over how and when the Strait of Hormuz might reopen more than two months into the Iran war.
“Ultimately, it’s still going to come back to the primary issues of risk and safety,” that shippers have to evaluate, said Sean Pribyl, a maritime attorney at Holland & Knight in Washington, D.C. ”It seems as though we’re not anywhere near to returning to a free flow of traffic and navigation through the strait,” he added.
To pressure Iran, the U.S. Navy is blockading Iran’s ports, enforcing the blockade outside the strait in the Gulf of Oman and the Arabian Sea.
Holland & Knight’s Pribyl said shippers and ship insurers are likely still assessing the scenario in the strait. Ships carry two main types of insurance: protection and indemnity, which covers property and third-party liabilities, and — during a conflict — war risk insurance that covers damage and losses due to war.
“Ferrying out a couple of ships has not really affected the shipping industry in any way whatsoever,” he said.
The Maersk shipping company said its U.S.-flagged Alliance Fairfax vehicle carrier exited the Persian Gulf through the Strait of Hormuz “accompanied by U.S. military assets” on Monday. “The transit was completed without incident, and all crew members are safe and unharmed,” the company said in a statement.
Oil prices and shipping are unlikely to return to normal until it’s clear the risk of attacks in the Strait of Hormuz have receded, cautioned Kaho Yu, head of energy and resources at risk intelligence company Verisk Maplecroft.
“Even with diplomatic engagement continuing, energy markets are unlikely to return quickly to precrisis assumptions,” he said. “Refiners, shippers, and commodity traders will remain cautious until there is clearer evidence that Hormuz disruptions will not re-escalate.”
If the ceasefire holds and ships gradually begin transiting the Strait of Hormuz again, shipping won’t “snap back overnight,” warned Razat Gaurav, CEO of Kinaxis, a supply chain management company.
“Even when conditions improve, carriers, insurers, and shippers need confidence that stability will hold before capacity and routes fully normalize,” he said. “Air cargo can recover relatively quickly, but ocean shipping typically takes weeks or months because of longer lead times and contractual constraints.”
He said shipments of certain categories like liquid natural gas and sulfur, where the Middle East is a major source of supply, are likely to move more quickly as backlogs clear, but “most shippers will remain cautious until stability proves durable,” he said.
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McHugh reported from Frankfurt, Germany.
