Strait of Hormuz GPS jamming remains major security issue, tanker CEO says
According to Angeliki Frangou, a fourth-generation shipowner and chairman and CEO of Greece-based Navios Maritime Partners, which owns and operates dry cargo ships and tankers, vessels in the Strait of Hormuz are still being threatened by continuous GPS signal blocking. The GPS jamming has more vessels waiting to pass through the Strait of Hormuz.
"We have had about 20% less passage of vessels through the Strait of Hormuz, and vessels are waiting outside," Frangou told CNBC. "You are hearing a lot from the liner [ocean shipping] companies that they are transiting only during daytime because of the jamming of GPS signals of vessels. They don't want to pass during the nighttime because they find it dangerous. So it's a very fluid situation," Frangou said.
A June 20 estimate from the Maritime Information Cooperation & Awareness Center indicated that 970 ships per day had experienced GPS interference over the prior week.
Data from shipping intelligence firm Kpler shows the overall traffic in the Strait of Hormuz decreasing from June 13 to June 22, based on analysis of Maritime Mobile Service Identity (MMSI) accounts for all vessels and tankers in the area. A MMSI is a unique nine-digit number used to identify vessels and used for vessel tracking and communications.
On June 13, the unique MMSI count for all kinds of vessels was 16,127, and that was down to 7,947 on June 22. For tankers, the unique MMSI count went down from 1,120 to 889 on June 22.The Strait of Hormuz, which connects the Persian Gulf to the Arabian Sea, is a critical transit path for global oil and gas shipments, with roughly 20% global oil and gas passing through its narrow waters.
At its narrowest point, the Strait of Hormuz is 21 miles, and that is a primary reason why the GPS signal jamming is a critical issue for ships, Frangou said. "This is very important," Frangou said. "For the safety of the crew and the vessel. ... Safety conditions are something that is at the forefront of our minds. This is why we are constantly monitoring all this," she added.
The ongoing security risks associated with traversing the Strait of Hormuz has fueled insurance rates and ocean freight rates.
Rates from Shanghai to the port of Khor Fakkan, which is situated on the UAE Indian Ocean coastline, are up 76% in comparison to mid-May, according to spot ocean freight rate data tracked by freight intelligence platform Xeneta. The average spot rates have reached $3,341 per forty-foot equivalent unit (FEU.)
The Port of Khor Fakkan is located outside the Strait of Hormuz. Due to its location, the port is considered to be one of the most important transshipment hubs for the Arabian Gulf, the Indian Sub-continent, the Gulf of Oman, and the East African markets.
"The reality is that yesterday [Monday] we saw that rates doubled on the passage," Frangou said. "This can change quickly, but what we have seen is that when they go up, it's more difficult to bring them down," she added.
Unlike the Red Sea diversions caused by Houthi rebel attacks — which have been in place since mid-December 2023 for vessels to avoid the waterway to the Suez Canal — tankers and containerships bound for ports on the other side of the Strait of Hormuz have no option.
"The spot market for VLCC [very large crude carriers] has moved up $70,000 per day," Frangou said. "So even though oil has not gone up, we saw the VLCC rates, the very large Crude Carriers, have gone up. It is very much wait-and-see," she added.
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