Following an interim peace deal between the US and Iran, commercial shipping through the Strait of Hormuz has significantly increased, with the US estimating oil flows at over 10 million barrels per day. This surge in traffic is attributed to American military support, including air and naval forces, which has boosted confidence for shippers using a US-administered corridor in Omani waters. This normalization of shipments is a key focus for traders, who are eager for the region's exports to return to pre-war levels, thereby adding millions of barrels daily to the market and easing a prior surplus in cargoes.
However, the situation remains volatile. While Saudi Arabia's crude oil exports have neared pre-war rates, reaching 6.3 million barrels per day, there have been instances of tankers making U-turns. For example, two empty crude tankers reportedly approached the Strait of Hormuz before turning back when peace negotiations between the US and Iran broke down in April, leading to renewed uncertainty regarding a fragile ceasefire. This highlights the ongoing geopolitical tensions impacting shipping routes.
The increase in oil flows from countries like Saudi Arabia and the UAE is a strong indicator that Persian Gulf shipments are stabilizing. Saudi Arabia, the world's top exporter, shipped 6.3 million barrels per day over six days, reaching about 90% of its February average before the Iran war. The UAE has also restored its oil exports to over 3.9 million barrels per day. The sudden influx of supply into the market has led to a slump in oil futures, erasing gains seen during the war.
Adding to the complexity, Iran's Islamic Revolutionary Guard Corps continues to assert control over the waterway, and two vessels have been attacked. Despite an agreement in the interim peace deal allowing ships to pass through Hormuz, Iran has continued to claim sovereignty, contributing to the fluctuating transit patterns. Some vessels are even using routes closer to Iran's coast, alongside the US-administered corridor, further illustrating the contested nature of the strait's navigation.
