Renewed military clashes between the US and Iran have paralyzed the Strait of Hormuz, the most strategic point in the global energy supply chain. Maritime data shows that ship traffic in the strait has come to a dramatic standstill.
According to Lloyd's List Intelligence, since July 7, no large vessel over 10,000 dwt has transited the US-coordinated southern route with an AIS signal. The company estimates at least two ships passed with their systems turned off.
Maritime intelligence platform Windward announced that only five vessels were trackable in the strait as of Thursday morning. Before the clashes, an average of 130 ships transited daily. UK Maritime Trade Operations (UKMTO) stated that this low traffic level reflects shipping companies' 'cautious stance' and the 'rising threat environment' in the region.
Iran's attack capability threatens all shipping
John Bradford, Executive Director of the Yokosuka Council for Asia-Pacific Studies, said Iran's capacity to strike vessels in the Persian Gulf, Strait of Hormuz, and Gulf of Oman puts all regional shipping at risk. Bradford warned that as the crisis drags on, shipping may shift to other ports and routes.
Mutual attack claims and contradictory statements
Iran reported multiple explosions in the south of the country on Thursday. However, a US official said US forces were not behind these attacks; no country or group has claimed the blasts. In response, Iranian officials and media claimed that Tehran's forces struck US military assets in Bahrain, Kuwait, Qatar, Jordan, and Iraq to retaliate against Washington's operations launched in response to attacks on ships in the Strait of Hormuz.
Calm in oil prices may be temporary
Despite the fierce clashes in the region, oil prices held largely steady on Friday. Brent crude was trading at $76.37 a barrel as of 02:30 GMT, up more than $4 compared to last week. Bart Melek, Global Head of Commodity Strategy at TD Securities, said the relative price stability reflects market confidence that the situation in the Middle East will calm, but upward pressure will mount in the coming weeks as reserves dwindle. 'We forecast Brent to rise $10-15 towards the summer,' Melek said.
June Goh, Senior Oil Analyst at Sparta Commodities, said the biggest price pressure is on refined products, especially diesel, rather than crude. 'Diesel is being hit by both the supply loss from Middle East refineries and the ongoing drone strikes on Russian refineries, and prices are well above seasonal norms,' Goh said.
Asian markets open higher
After a 0.8% rise in US stocks, Asian equity markets opened positively on Friday. Tokyo's Nikkei 225 gained 1.9%, Seoul's Kospi jumped 3.6%, and Hong Kong's Hang Seng rose 1.4%.
