Strait of Hormuz Traffic Collapses
Tanker traffic in the Strait of Hormuz has dropped 90% in a week amid escalating Iran conflict, with Maersk suspending bookings. A Malta-flagged ship was hit by missiles but crew rescued by Oman. Oil prices spiked around 5% on supply concerns as the critical shipping lane faces unprecedented disruption.
The Strait of Hormuz is the world's most critical oil chokepoint, with about 20% of global oil consumption and 20% of liquefied natural gas (LNG) transiting the narrow waterway between Iran and Oman daily. Its closure affects major oil exporters like Saudi Arabia, Iraq, the UAE, and Kuwait, for whom it is the primary route to global markets. The immediate shutdown follows Iran's Islamic Revolutionary Guard Corps (IRGC) declaring it has "complete control" over the strait, warning that any vessel attempting to pass risks being targeted. This escalation is part of a wider conflict that saw Iran launch retaliatory missile and drone strikes across the Middle East. The Malta-flagged vessel hit was the container ship Safeen Prestige, which was struck by at least one missile two nautical miles off the coast of Oman. The projectile caused a fire in the engine room, forcing the 24 crew members to abandon the ship; they were all safely rescued by Omani naval forces. The attack was the fourth on commercial shipping in the region within a 24-hour period. In response, major shipping lines including Germany's Hapag-Lloyd and France's CMA CGM have joined Maersk in suspending all transits through the strait. Maritime insurance companies have cancelled war risk coverage for the region, making passage prohibitively expensive and effectively closing the waterway to most commercial traffic. The disruption disproportionately impacts Asian economies, which receive nearly 90% of the crude oil that passes through the strait. China is the largest single recipient, followed by India, South Korea, and Japan, all of whom face a severe shock to their energy supplies and manufacturing sectors. Alternative routes for Persian Gulf oil are extremely limited and cannot replace the strait's capacity. Saudi Arabia and the UAE operate pipelines that bypass the waterway, but they can only handle a fraction of the typical daily oil flow and some of this infrastructure has also been targeted. This crisis has echoes of the "Tanker War" during the 1980-1988 Iran-Iraq War, which also saw hundreds of attacks on merchant vessels in the Persian Gulf. During that conflict, international navies eventually intervened to escort tankers and ensure freedom of navigation.
