Disruption in the Strait of Hormuz - What you need to know

The Strait of Hormuz is a narrow waterway connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea. It sits between Iran to the north and Oman and the United Arab Emirates to the south, forming one of the world’s most strategically sensitive maritime corridors.

Its importance lies in the volume of global energy and containerised trade that passes through it. A significant share of the world’s seaborne oil exports transits the Strait each day, alongside LNG and general cargo.

There are limited viable alternatives for Gulf exports, so any disruption in this corridor can quickly ripple through global freight markets, affecting vessel deployment, insurance premiums, transit times and capacity across Asia–Europe trade lanes.

Following the escalation of tensions in the region, MarineTraffic reported a 70% drop in vessel traffic in the period immediately after the conflict escalated. Carriers changed routing to avoid risk exposure across affected services.

Since the announcement of a two-week conditional ceasefire on the 8th of April – of which the reopening of the Strait was a core component – major carriers have continued to avoid the Strait, citing crew safety and ongoing uncertainty.

If the ceasefire holds, it is important to note that disruption will continue for the foreseeable future. Toll management, insurance coverage, and safety confidence all need to be in place before the Strait can resume normal operations, and the recovery of equipment levels in the area will also take time. 

Industry estimates put stabilisation at four to six months after genuine reconciliation.