Shipowners and traders are approaching the recent United States-Iran deal to reopen the Strait of Hormuz with caution, demanding more details before they consider resuming transits through the critical waterway. The agreement, which aims to end months of disruption, has been met with skepticism after numerous false starts.
Deal Announced, but Doubts Persist
News of the long-awaited accord between Washington and Tehran drove Brent oil futures down nearly five percent. However, those responsible for transporting crude and liquefied natural gas worldwide remain uncertain about the practical implications of the reopening, which U.S. President Donald Trump has said will occur on Friday.
Iran's semi-official Fars News Agency reported that transits will be free for 60 days, after which Tehran will begin charging fees. Future administration of navigation services in the strait will be determined jointly by Iran and Oman, according to the agency.
Industry Calls for Clarification
BIMCO, the world's largest trade association for shipowners, emphasized that key details still need clarification before transit can be considered safe. Angad Banga, CEO of maritime conglomerate The Caravel Group, which owns Fleet Management Limited, expressed caution: "From the bridge and the engine room where we're sitting, right now it looks very different to what the headlines may say. We've seen positive signals before, and I think ultimately what matters is what holds."
Major Japanese shipping companies, among the first to respond to the deal, echoed these concerns. Mitsui OSK Lines stated that close coordination with governments and insurance firms would be essential before it could send ships through the strait again. Nippon Yusen KK added that normalization of traffic depends on the specifics laid out in the agreement.
Limited Activity in the Strait
In the hours following the announcement, there was little activity in the strait, with only one liquefied natural gas tanker, Disha, testing the waters as it headed into the eastern arm of Hormuz toward the Gulf of Oman. The narrow width of the strait raises the risk of collisions if vessels rush to exit simultaneously.
Anoop Singh, global head of shipping research at Oil Brokerage Ltd., noted varying risk appetites among shipowners: "Shipowners are on a risk spectrum — the Japanese, Koreans and Chinese are less open to high risk, while the Greeks have a different appetite — so we may see some people gearing up. But by and large the rest of the market is still seeking more details and assurance before proceeding."
Impact on Global Energy Trade
The Strait of Hormuz, a vital conduit for global oil and gas, has been at the heart of the conflict since the first days of strikes on Iran. The disruption has upended the global energy trade, cutting off some of the world's top producers and forcing major players to resort to dark transits or government-to-government negotiations to move cargo.
Traffic through the strait has slowed dramatically since U.S. and Israeli strikes began at the end of February, sinking to a fraction of the pre-war average of about 135 transits daily. In theory, even a temporary peace deal should release millions of barrels of oil that have been trapped for months in the Persian Gulf. However, shipowners and traders are waiting for concrete assurances before committing to safe passage.
