Latest news with #HormuzStrait
Al Arabiya
2 days ago
- Business
- Al Arabiya
Oil tanker rates collapse as conflict in Middle East abates
The cost of shipping Middle East crude to customers in Asia collapsed on Thursday, the latest sign of oil markets returning to normal after conflict eased in the world's top petroleum-exporting region. Charter rates slumped by 17 percent to 55.50 industry-standard Worldscale points, according to data from the Baltic Exchange in London. It works out at roughly $1.60 a barrel. 'Risk premiums have naturally faded,' said Fredrik Dybwad, an analyst at Fearnley Securities AS. 'There is ample vessel availability, and considering normal seasonality, rates should naturally find a lower level.' Shipping prices soared two weeks ago amid concern Iran might disrupt maritime traffic around Hormuz Strait, a vital waterway through which 20 percent of the world's oil and liquefied natural gas must pass. After almost two weeks of fighting between Iran and Israel that began on June 13, there's since been a ceasefire, hitting oil prices and lowering the risks for ships that enter the region. The Joint Maritime Information Center, a naval liaison with commercial shipping in the region, said Thursday that no hostilities had been reported in the Strait of Hormuz over the past 48 hours and that traffic had returned to normal levels. 'A sustained period of inactivity and strengthening of the ceasefire agreement will stabilize maritime tension in the Arabian Gulf,' it said in a note. 'Now that the market has become sanguine about Iran shutting the Strait of Hormuz, ships are running fluidly again, the premium gas been removed, and rates are correcting lower meaningfully,' said Jonathan Chappell, senior managing director at Evercore ISI. The Worldscale system is designed to let owners and charterers quickly calculate the latest earnings and per-barrel costs on thousands of trade routes. Vessels on the industry's benchmark Saudi Arabia-to-China route are earning $35,281 a day, according to the Baltic Exchange. They were making almost $76,000 on Monday.
Yahoo
5 days ago
- Business
- Yahoo
How the closure of Strait of Hormuz could impact markets
Commodity markets were volatile on Monday as the world waited to see whether Iran would carry out its threat to shut down the Hormuz Strait. Iran's parliament voted at the weekend to shut down the vital Hormuz shipping channel in retaliation for US president Donald Trump's attack on the country's nuclear facilities. The final decision to shut the pathway rests with Iran's supreme national security council, following the non-binding vote. If the closure happens, it would be unprecedented and likely have profound consequences for the global economy and energy supply. Here's everything you need to know: Around a fifth of the world's oil consumption flows through the Strait of Hormuz. It is the entry and exit point to the Persian Gulf and a cornerstone for the energy market, with around 30% of the world's liquified natural gas sourced there, too. In May, approximately 17.8 million to 20.8 million barrels of crude, condensate, and fuels flowed through the strait daily, according to data from analytics firm Vortexa. Read more: LIVE: Wall Street wavers, European stocks fall as investors await Iran's response to US strikes Saudi Arabia uses it to export around 6 million barrels of crude oil per day, more than any neighbouring country. Meanwhile, Iran exports about 1.7 million barrels per day, according to the International Energy Agency. Iran exported $67bn (£49.8bn) worth of oil in the financial year ending March 2025 — its highest oil revenue in the past decade — according to estimates by the Central Bank of Iran. The majority of exports are sent to Asia. China alone is estimated to buy around 90% of the oil that Iran exports to the global market. However, the economic inflationary shocks of any closure could be felt globally, with increased energy prices rippling into the real economy. If the Strait is closed by Iran's national security council, the country will have to decide how to close the stretch of water. To the north of the passage is Iran, and to the south is the UAE and Oman. It's about 33km wide at its narrowest point and 50km at its entrance and exit. UN rules allow countries to exercise control up to 12 nautical miles (13.8 miles) from their coastline. So far, Israel's military and US attacks have been focused on Iran's nuclear programme and other targets, instead of its naval assets. According to reports and analysis, Iran's navy could move to lay out a number of mines in the sea via fast attack boats and submarines to protect the closed Strait on the country's southern border and stop ships passing into the Persian Gulf. Stocks: Create your watchlist and portfolio While this might be the most effective way to block the Strait, the US and other countries could then wrest control back through military means to re-establish the passage of ships. For markets, the long-run impact of closing this shipping route is largely unknown. Oil prices ticked between gains and losses on Monday reflecting anxiety, but many traders are still in "wait and see" mode as Iran weighs its options. 'The markets are not yet reacting with any degree of panic to the US airstrike on Iran's nuclear facilities as they await to see how Tehran responds," said Russ Mould, investment director at AJ Bell. 'The promised two-week hiatus as the US weighed its decision didn't materialise as the Trump administration acted on Saturday. After briefly spiking above $80 per barrel when the market opened in Asia on Monday, Brent pared those gains to trade modestly higher." Analysts at Goldman Sachs predicted that disruptions could push the price of Brent crude over $100 per barrel — the highest point since August 2022. This would push up transport costs, lift inflation and hurt growth across Western economies. And when oil prices move, so do the stock prices of oil majors. FTSE 100 (^FTSE) stalwarts BP (BP.L) and Shell (SHEL.L) are likely to be in the crosshairs for any impact. On Monday, oil majors' share prices ticked higher, with BP more than 1.4% in the green by the afternoon and Shell seeing a 0.8% uplift. Shipping operators and container companies are keeping a close eye on any movement. "We continue to monitor the situation very closely, especially considering the US involvement in the conflict," Maersk ( wrote on its website. "At the moment, sailing through the Strait of Hormuz continues, but we are ready to re-evaluate this based on information available. Equally, we will continuously monitor the security risk to our specific vessels in the region and are ready to take operational actions as needed," it added. Read more: Oil jumps to 5-month high after Iran votes to close Strait of Hormuz Trending tickers: IAG, Novo Nordisk, Shell, Stellantis, LVMH Strait of Hormuz saber-rattling ramps up following US attack. Whether the key waterway will close is less clear
News24
6 days ago
- Politics
- News24
US strikes against Iran not aimed at regime change, Pentagon chief says
US Defence Secretary Pete Hegseth emphasised that the recent US strikes on Iran's nuclear sites were aimed at neutralising threats, not initiating regime change. The operation, named 'Operation Midnight,' deployed significant military resources, resulting in severe damage to Iranian nuclear sites but heightened tensions in the already volatile Middle East. Iran responded with missile strikes on Israel, causing damage and injuries, while also threatening to close the Hormuz Strait, a critical oil shipment route, as US forces in the region remain on high alert. The US military's strikes on Iran's nuclear sites were not a preamble to plans for regime change, US Defence Secretary Pete Hegseth said on Sunday, adding that private messages had been sent to Tehran encouraging them to negotiate. Still, Hegseth warned Iran against following through with past threats of retaliation against the United States, and said US forces were postured to defend themselves, and take action if needed. "This mission was not and has not been about regime change," Hegseth told a reporters at the Pentagon. "The president authorised a precision operation to neutralize the threats to our national interests posed by the Iranian nuclear program." The US strikes included 14 bunker-buster bombs, more than two dozen Tomahawk missiles and over 125 military aircraft, in an operation the top US general, General Dan Caine, said was named "Operation Midnight." Caine said initial battle damage assessments indicated that all three sites sustained extremely severe damage and destruction, but he declined to speculate whether any Iranian nuclear capabilities might still be intact. The operation pushes the Middle East to the brink of a major new conflagration in a region already aflame for more than 20 months with wars in Gaza and Lebanon and a toppled dictator in Syria. Tehran has vowed to defend itself, and responded with a volley of missiles at Israel that wounded scores of people and destroyed buildings in its commercial hub Tel Aviv. But, perhaps in an effort to avert all-out war with the superpower, it had yet to carry out its main threats of retaliation - to target US bases or choke off the quarter of the world's oil shipments that pass through its waters. The Iranian parliament approved closing the Hormuz strait, a potential choke point for oil shipments, but the country's top security body is required to make a final decision, Iran's press TV reported. Caine said the US military had increased protection of troops in the region, including in Iraq and Syria. "Our forces remain on high alert and are fully postured to respond to any Iranian retaliation or proxy attacks, which would be an incredibly poor choice," Caine said.
Wall Street Journal
6 days ago
- Politics
- Wall Street Journal
Will Iran Attempt to Block the Strait of Hormuz?
An image provided by the Iranian Army office in 2022 shows Iranian troops during a military drill near the Hormuz Strait. (Iranian Army office/AFP/Getty Images))
Al Arabiya
6 days ago
- Politics
- Al Arabiya
Iranian parliament reportedly approves closing Hormuz Strait: Media
Iranian parliament has approved the closing of Hormuz Strait, Reuters reports citing the Press TV adding that the top security body is required to finalize a decision on this measure. Developing
