Hormuz traffic stays thin as diplomacy falters

Arabian Post - The flow of ships through the Strait of Hormuz has been significantly reduced due to deteriorating diplomatic relations between the United States and Iran. On a recent Tuesday, only eight vessels were recorded passing through the strait, compared to an average of 12 over the past 10 days. On Monday, six vessels passed through, below the 10-day average of 11. This sharp decline marks a stark contrast to pre-conflict conditions, when approximately 130 to 140 vessels typically traversed the strait daily.

The oil and petroleum-product trade has been particularly hard hit, with daily traffic dropping from 21.6 million barrels in late 2025 to an estimated 4.9 million barrels in the second quarter of 2026. This reduction has exacerbated pressure on energy markets, as the strait is a critical export route for several Gulf nations, including Saudi Arabia, the UAE, Kuwait, Qatar, Iraq, Bahrain, and Iran. Liquefied natural gas shipments from Qatar also rely heavily on the strait.

Brent crude prices surged towards $90 a barrel on Wednesday as traders evaluated the potential for prolonged disruptions. At the start of the week, Brent was around $89.63 a barrel, while US West Texas Intermediate crude neared $83.91. Earlier price spikes were driven by weakening expectations of a diplomatic breakthrough. Recent negotiations have become more contentious after both Washington and Tehran introduced new demands.

Iran has tied the reopening of the strait to concessions from the United States, such as sanctions relief, access to frozen assets, and compensation for damages caused by the war. In contrast, US President Donald Trump has demanded compensation from Iran for alleged decades of harm inflicted by Iran and its supported groups. These divergent financial interests have complicated efforts to reach a lasting agreement.

Oman plays a pivotal role in mediating a viable solution for commercial shipping. Iran and Oman have been discussing revised navigation arrangements, including alternative shipping lanes to facilitate greater traffic through the strait. However, even if these maritime arrangements are finalized, they may not automatically lead to a broader political resolution.

Iran insists it is not directly negotiating with Washington, with communication channels maintained through intermediaries. The security situation in the Gulf has also worsened, with commercial ships under heightened military surveillance and recent attacks and interceptions adding to the uncertainty for shipowners and insurers.

The Hormuz disruption has compelled energy producers and importers to rely more on inventories, pipelines, and alternative suppliers. Traditionally, the bulk of oil exported through the strait headed to Asian markets, with China, India, and Japan as major destinations. While alternative pipelines can bypass Hormuz for part of Saudi Arabia’s and the UAE’s exports, the available capacity remains far below the usual volumes.

Qatar’s LNG exports have even fewer alternatives, as nearly all shipments must pass through the strait.