Hormuz Strait Traffic Dwindles Amid Iran-Oman Talks; Shipowners Wary of Entering

Vessel traffic through the Strait of Hormuz has seen a notable decline this week, with only 33 vessels transiting from Monday to Thursday, compared to 50 in the previous week. This reduction coincides with ongoing diplomatic talks between Iran and Oman, which markets are closely monitoring for any signs of progress in ensuring the safe passage through the vital waterway.

Data from Kpler shows that on Thursday, only four vessels passed through the strait. Among them was the Nissos Kea, a very large crude carrier transporting approximately 2 million barrels of Basrah crude oil from Iraq. The remaining vessels included two carrying liquefied petroleum gas and one minor bulk carrier. In total, only six crude oil tankers have exited the strait this week, while 21 have entered, primarily via the Iranian route.

Chinese and Indian refiners have shown interest in purchasing crude oil from Iraq's Basrah Oil Terminal, attracted by significant discounts of nearly $30 a barrel for Basrah Heavy and Basrah Medium crude for August loading. However, shipping sources indicate that no vessels have been fixed yet, as shipowners are reportedly wary of entering the waterway.

Industry sources suggest that a proposed deal between Iran and Oman, which would grant Tehran control over ships entering the Gulf via the Strait of Hormuz, faces challenges due to U.S. sanctions and restrictive insurance clauses. Meanwhile, traffic through the Bab el-Mandeb strait on the Red Sea has increased, with 26 vessels transiting on Thursday, up from 19 the previous day.