Oil Tanker Routes Rerouted as strait of Hormuz Tensions Spike
Table of Contents
heightened geopolitical tensions surrounding the Strait of Hormuz are causing important disruptions to oil tanker traffic, with several vessels altering thier courses to avoid the critical chokepoint. This comes amid reports of increased electronic interference and GPS jamming in the region,further exacerbating concerns for maritime safety. The situation has already impacted global oil prices, which briefly jumped approximately 6% on June 22, 2025, with Brent futures reflecting a heightened risk premium [[1]].
Tanker Traffic Diverted Amidst Rising Concerns
Data from Kpler,a firm specializing in industry data,indicates that at least six vessels-including two very large crude carriers,three chemical tankers,and one refined products carrier-diverted from the Strait of Hormuz between early Sunday and early Monday. According to Yui Torikata, senior liquid market analyst at kpler, the situation remains fluid.The affected vessels include:
- Damsgaard (Norway flag)
- South Loyalty (Marshall Islands flag)
- Coswisdom Lake (Hong Kong flag)
- Kohzan maru (U.K. flag)
- Red Ruby (Panama flag)
- Marie C (Marshall Islands flag)
Notably, all six vessels were in ballast, meaning they were either empty or carrying light loads. Though, 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.
Did You Know? the Strait of Hormuz is one of the world’s most strategically crucial chokepoints, with approximately 21 million barrels of oil passing through it daily in 2023, representing about 20% of global petroleum liquids consumption [[2]].
Geopolitical Instability Fuels Shipping Concerns
These disruptions follow a reported U.S. attack on Iranian nuclear enrichment facilities. Adding to the unease, the UK Maritime Trade Operations has reported widespread electronic interference, GPS jamming, and location spoofing, raising significant worries for vessel owners. The recent collision between the Frontline tanker Front Eagle and the dark fleet tanker Adalynn near the Strait of Hormuz, which resulted in a fire on the Front Eagle, has further amplified concerns.
Andy Lipow, president of Lipow Oil Associates, suggests that increasing insurance costs and heightened risks are prompting some owners to avoid the area altogether. Frontline, a major tanker company, has already announced it will no longer except new contracts to sail through the Strait of Hormuz, a decision that other companies are likely to follow. This could lead to a de facto partial supply disruption if there is a lack of tankers to carry the oil that needs to be exported.
Pro Tip: Monitor insurance rates for vessels transiting the strait of Hormuz. A sharp increase can be a leading indicator of heightened risk and potential disruptions.
Iran’s Potential Response and Global Implications
Adding another layer of complexity, Iran’s parliament reportedly voted to block the strait of Hormuz, although a final decision rests with the country’s national security council. British maritime security firm Ambrey has issued an alert that five U.S.-affiliated merchant ships departed the Arabian/Persian Gulf as the U.S. military operations, and no ships publicly affiliated with the U.S. appear to have entered the area as the U.S. strikes. Ambrey believes Iran is “almost certain to respond militarily to the U.S. strikes on nuclear facilities,” potentially including attacks or seizures of US-affiliated shipping.
Jakob Larsen, head of security at Bimco, warns that Iran could attempt a wider disruption of commercial shipping in the Strait of Hormuz through attacks on merchant ships, potentially using anti-ship missiles or drones. The laying of sea mines is another potential, albeit less likely, scenario.
Impact on Global Trade and Shipping
While the Strait of Hormuz primarily impacts oil flows, it also plays a crucial role in regional container trade. Although it handles less than 4% of global container trade, 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 these ports are destined for Dubai, a major hub for freight movement with feeder services in the Persian Gulf, South Asia, and East Africa.
| Vessel Name | Flag | Departure Port | Destination | Cargo |
|---|---|---|---|---|
| Damsgaard | Norway | Qasim, Pakistan | Ruwais, Abu Dhabi | Ballast |
| South Loyalty | Marshall Islands | Ulsan, South Korea | Basra, Iraq | Ballast |
| Coswisdom Lake | Hong Kong | Zhanjiang, China | Zirku, UAE | Ballast |
| Kohzan Maru | U.K. | Niigata, Japan | N/A | Ballast |
| Red Ruby | Panama | Fujairah, UAE | Fujairah, UAE (returned) | Ballast |
| Marie C | Marshall islands | Fujairah, UAE | Kuwait | Ballast |
What measures should international bodies take to ensure safe passage through the Strait of Hormuz? How might choice trade routes mitigate the impact of potential disruptions?
evergreen insights: The Strait of Hormuz and Global Oil Supply
the strait of Hormuz has long been a focal point of geopolitical tension due to its strategic importance in global oil supply. Its narrow width, approximately 21 miles at its narrowest point, makes it vulnerable to closure or disruption. Throughout history, various conflicts and political disputes have threatened the flow of oil through the strait, leading to price volatility and economic uncertainty. The dependence of major economies on Middle Eastern oil transiting this waterway underscores its critical role in global energy security.Alternative routes, such as pipelines, exist but lack the capacity to fully replace the Strait of Hormuz. Therefore, maintaining stability and ensuring freedom of navigation in the region remains a top priority for international policymakers.
Frequently Asked Questions About the strait of Hormuz
- Why is the Strait of Hormuz so critically important for global oil markets?
- The Strait of Hormuz is a critical chokepoint for global oil markets as a significant percentage of the world’s oil supply passes through it daily. Disruptions to this waterway can lead to immediate price increases and supply shortages.
- what factors could lead to the closure of the Strait of Hormuz?
- Several factors could lead to the closure of the Strait of Hormuz, including military conflict, political instability, or intentional actions by regional powers. Any of these events could severely impact global oil supplies.
- How would a closure of the Strait of Hormuz affect global oil prices?
- A closure of the Strait of Hormuz would likely cause a sharp increase in global oil prices due to reduced supply and increased uncertainty.This could have cascading effects on the global economy.
- are there alternative routes for transporting oil if the Strait of Hormuz is blocked?
- While alternative routes exist, such as pipelines, they do not have the capacity to fully replace the Strait of Hormuz. This makes the strait a critical vulnerability in the global oil supply chain.
- What is the role of international navies in the Strait of Hormuz?
- International navies play a crucial role in maintaining security and freedom of navigation in the Strait of Hormuz. Their presence helps to deter potential threats and ensure the safe passage of commercial vessels.
- How does geopolitical instability in the Middle East affect the Strait of Hormuz?
- Geopolitical instability in the Middle East directly impacts the Strait of Hormuz, as it increases the risk of conflict and disruptions to shipping. This can lead to higher insurance costs and increased volatility in oil markets.
- What are the potential long-term consequences of continued tensions in the Strait of Hormuz?
- Continued tensions in the Strait of Hormuz could lead to long-term disruptions in global oil supply, increased energy prices, and greater economic instability. It could also incentivize countries to diversify their energy sources and reduce their dependence on Middle Eastern oil.
