Tankers reversing course from Strait of Hormuz following U.S. attack on Iran nuclear sites

CNBC

6 days ago

More tankers are reversing course away from the Strait of Hormuz as concerns rise on the possible closure of the vital chokepoint of trade.
Yui Torikata, senior liquid market analyst at industry data firm Kpler, said the situation is fluid.
The firm's data is showing a notable event occurred between early Sunday and early Monday, when at least six vessels — two very large crude carriers, three chemical tankers, and one refined products carrier—diverted their courses away from the Strait of Hormuz.
The specific vessels identified are:
All vessels are in ballast, meaning they either are empty or carrying light loads.
"However, the situation has already evolved," Torikata said. "As of this morning, three of those six vessels —the South Loyalty, Coswisdom Lake, and Damsgaard — have again changed direction and are now heading back towards the Strait of Hormuz. The other three vessels are currently idling off the coasts of Khor Fakkan and Muscat."
"This specific weekend event should be seen in a broader context," said. "In the immediate wake of the Israel-Iran conflict, the number of available empty [ballast] crude carriers within the Middle East Gulf zone fell to a record low, indicating significant reluctance from shipowners to enter the area. However, that trend has since reversed.
"The count of available tankers recovered toward the weekend, and the number of crude carriers in the Gulf of Oman signaling their intent to enter the Mideast Gulf has also recovered from the low seen on June 16," she added. "This suggests that, for now, the overall flow of vessels into the region is being sustained despite the recent, specific diversion event."
The moves follow a U.S. attack Saturday on what have been identified as three major nuclear enrichment facilities in Iran.
Andy Lipow, president of Lipow Oil Associates, said the reports by the UK Maritime Trade Operations on widespread electronic interference and GPS jamming and location spoofing are adding to vessel owners' worries.
"Combined with increasing insurance costs, some owners will simply avoid the area — like Frontline. This causes a de facto partial supply disruption if there is a lack of tankers to carry the oil that needs to be exported," Lipow said.
Frontline tanker Front Eagle and dark fleet tanker Adalynn collided last week near the Strait of Hormuz. Following the collision, a fire on the deck of the Front Eagle erupted and was extinguished.
"Some tanker owners may feel that China, who buys 90% of Iranian crude oil along with significant quantities of oil from the Middle East, is pressuring Iran not to disrupt shipping," Lipow said. "While oil exports are Iran's economic lifeline and it would not be in Iran's interest to halt its own exports, if cornered, Iran might decide to inflict as much economic pain as it can on the rest of the world."
Lipow added this attack could spark additional geopolitical instability.
"While China has condemned the United States attack on Iran, we have not seen China provide Iran with any kind of support other than words," Lipow said. "Russian attacks Ukraine, the United States attacks Iran, now China may feel emboldened to attack Taiwan."
Jakob Larsen, head of security at Bimco, the world's largest direct-membership organization for shipowners, charterers, shipbrokers, and agents, warned Iran could attempt a wider disruption of commercial shipping in the Strait of Hormuz through attacks on merchant ships. Anti-ship missiles or drones of both airborne and surface types could be used in these attacks, he said.
"The laying of sea mines would constitute another dangerous development, but Iran's intent to do so is questionable due to the risk to Iran-affiliated commercial ships and the risk of environmental disaster in case a ship is damaged," Larsen said.
The Strait of Hormuz, which connects the Persian Gulf to the Arabian Sea, is recognized as one of the world's most important oil chokepoints. The inability of oil to traverse through, even temporarily, can ratchet up global energy prices, raise shipping costs and create significant supply delays.
In 2023, oil flows through the waterway averaged 20.9 million barrels per day, accounting for about 20% of global petroleum liquids consumption, according to the U.S. Energy Information Administration.
Hormuz handles less than 4% of global container trade, but the ports of Jebel Ali and Khor Fakkan are critical intermediary points for global shipping networks in the region.
The majority of cargo volumes from those ports are destined for Dubai, which has become a hub for the movement of freight with feeder services in the Persian Gulf, South Asia, and East Africa.